Feast and famine

Accountants are lucky.

Lucky in the sense that a lot of the work we do is ongoing or repeat business. So if we look after our clients and do the right things, our firms should grow in an incremental way as we add new clients.

In other sectors things are less straightforward. A contractor on a 6 month contract needs to find a new customer when the contract ends. The same goes for a builder when they finish the extension they are working on or the freelance designer putting finishing touches to a new company logo.

When the current job stops for these guys, there can be a gap until the next one starts. That’s not a nice place to be. Bills still need to be paid, life needs to go on, but money may be tight.

So what’s the solution? How can the feast and famine cycle be avoided?

It’s a particular challenge for start ups who may not have the profile or recognition to generate a steady flow of new enquiries. 

Let’s start with what won’t work. 

Just waiting passively for the next customer, the next job to arrive, won’t work. 

You need to make your own luck. That means in the fallow periods putting all your energy and focus into finding the next customer. Whatever it takes. Following up old contacts. Networking. Finding your social media channel and using it to engage with potential customers. Email. Direct mail. Cold calling. Measure the results and keep doing what works.

Then you get lucky. You get a good lead. Proposal leads to an order and you are on the way again.

It feels great. This what you love. You get stuck in. 

This time though, you need to try and break the cycle and get your next job lined up before you finish the new one. That means putting some of your time aside every week for marketing (attracting new leads) and selling (doing your pitch and closing the deal). I’d suggest that about 10 to 20% of your time is about right for this so that’s half to one day a week. It could be one set day every week or an hour or so a day. It just needs to get done.

The feast and famine cycle is not a good way to run a business. It needs discipline and focus to break it and have a more regular flow of work.

The ideal is that you choose when to be idle rather than having it imposed upon you. 

When you are on holiday after a good spell of continuous work and your next job or jobs are lined up for when you get back, you will know you are on the right track.

www.base52.co.uk

Carry on networking

Browsing LinkedIn this week I came across a post from a marketing expert, specialising in the accountancy sector. 

The thrust of her message was that networking for accountants, particularly start-up accountants was not the best use of their time. There are better ways to spend 3 or 4 hours which would probably deliver more sales leads and be more productive.

I kind of get this. 

As an established accountancy firm owner I’m much more selective these days about the kind of networking I get involved in. More typically its, ‘One to one’ rather than ‘One to many’. A coffee and a chat with an existing contact or maybe someone I’ve not met before where there are opportunities to explore for mutual benefit.

In my start up days I did the rounds - structured networking groups like BNI and other, less formal groups. I put myself out there and got involved.

Looking back, I think it’s been worthwhile.

First it helped me think about my marketing and how I could stand out from other firms. There is nothing like knowing that you are going to have to present to 30 or 40 people to focus your mind and make you think about your message. If you don’t get it quite right, there’s always next week and gradually you refine it to get something a bit more polished and coherent.

It was a great way to learn presentation skills and other skills like...networking. How to talk to people (and listen!) in a crowded room and make a connection.

Then there are the contacts I made. The people I met networking who now look after our IT, our HR, manage our payroll, our marketing. They were contacts first, then people I liked and came to trust and then we worked together. They have developed into great, long term relationships. Being a business owner can be a tough journey and having a number of business pals to share it with is a positive thing.

It was good for awareness and raising mine and the firm’s profile. ‘There was that accountant bloke who I met at that networking group who specialises in that kind of service.’ Word got around.

Of course there were the sales. Particularly from structured networking we gained a good number of new clients, some of whom remain with us to this day.

For me, more structured networking which required a regular commitment, came to a natural end. It reached a point where the time and effort involved didn’t justify the payback. So more informal, targeted networking became more effective.

What would I say to my younger self though if I was starting out again? 

I think I’d say, ‘Carry on networking’. Keep reviewing, keep re-evaluating what works and what doesn’t, but carry on.

The benefits are much more than just achieving the next sale. The learning, personal development and connections you make are just as important and probably more enduring.

www.base52.co.uk

Partnerships should come with a health warning

Partnerships can be a beautiful thing.

Two people (it is usually two) working together to achieve more than they could on their own. 

It sounds great but the reality can be different. I’ve failed at working in a partnership. My ex-partner was (and is) a lovely, capable guy but being a double act didn’t work for either of us. We went our separate ways in business after a couple of years and I think we have both been happier and more fulfilled since the split.

Thankfully our break-up was fairly harmonious (they are never completely so) but in my time running an accountancy firm I have seen some less-friendly splits where the partners have ended up falling out very badly indeed. Often the rift comes from an imbalance in the relationship. One partner feels they are working harder or want more from the business than the other. Tensions build and often come to a head with an agreement to break the partnership.

For me it was a learning experience. On the positive side, having a partner gave me the confidence to start and develop the business. After we achieved a modest amount of scale however, I wanted more control of decision-making and mapping out the future direction of the business. In a nutshell I wanted to be master of my own destiny. 

I have seen some partnerships that work. More often than not, these are a couple who are already in a relationship. They are used to dealing with the ups and downs of life - falling out, making up and able to communicate effectively with each other.

One of the key ingredients in successful partnerships I believe is having clarity of roles and responsibilities. At the start up stage, each partner tends to ‘muck in’ and do what needs to be done. Very quickly they will need to carve out roles built around their individual strengths. One partner will usually emerge as the leader and I think it works best if each partner is responsible for different activities - marketing, selling, operations and so on.

Another important feature of successful partnerships is communication. More than this it needs to be open and honest communication. I have observed partnerships where there are clear roles and responsibilities, one partner is clearly the leader and the partners get on well. The weakness has been that the junior partner has not been able to communicate their concerns effectively to the senior partner. This has led to the senior partners taking excessive risks with poor outcomes for the business.

Partnerships can work but if you are thinking of joining forces with a work colleague or friend, my advice would be to think hard and then think some more. Visualise how you will work together, not just in the good times but in the bad times too, which will inevitably arise. 

Before committing, spend some time together preparing a business plan. This can ensure that you are 'on the same page' at the start and is a good trial for seeing how you work together and reach consensus,

1 + 1 can equal much more than 2 in the best of partnerships.

In some cases it can be much less than a sum of the parts and can lead to the end of a close and long-standing friendship. 

So tread very carefully and do your homework before taking the plunge. It may help you avoid an expensive and often painful mistake.

www.base52.co.uk

In praise of the launch

I stumbled across some old photos the other day. 

Photos of our launch event 16 years ago. My partner and I were starting a new accountancy practice. We’d just taken out a lease on a small office and we invited some friends, old work colleagues, local dignitaries and other contacts for drinks and canapés.

We are still in the same office but the team and the space we occupy has expanded significantly.

The launch was a modest affair but very convivial and enjoyable. I remember being hugely grateful to everyone who came along and supported us.

It was good to look at the photos and reminisce. Apart from everyone looking a lot younger something else slowly dawned on me. A very high proportion of the lovely guests who came along eventually became our clients. Not immediately, but in most cases several years later.

Ok, so these were already people we knew and had a relationship with but I have a feeling that attending the launch made them feel more emotionally connected with our business. When the time came for them to speak to an accountant, we were the natural choice.

So a launch can be a powerful thing with a long tail of goodwill extending into the future. If you are starting a business I’d recommend putting some time and energy into your launch and engaging with your network so they feel involved in your venture. 

It might just pay you back with interest for years to come.

www.base52.co.uk

Who is your ideal customer?

A simple question but one that many small businesses don’t take time to think about and build a strategy around.

Starting a business is tough and there can be a tendency to take on more or less any customers where you can provide them with your product or service and get paid. Being passive about this is probably not a good approach. 

Let’s say you’re a start up freelance designer. You can turn your hand to most types of creative work but what you really enjoy is film, video and animation projects. If you take on ‘any old job’ you will not be playing to your strengths and before too long you could get stuck in a cycle of poorly paid and unrewarding work.

So lets get back to the ideal customer. There are some ‘givens’ - they pay you on time, they recognise the value you provide and don’t squeeze you too much on price, they share your core values and ethical code, they are easy to deal with.

More than this we need to paint a mental picture of who they are. Are they members of the public or working in a business? If in a business what position do they hold? What age and gender are they? Where do they hang out? What social media platforms do they use? What do they read? What do they do in their leisure time?

Knowing what kind of customer you are looking for should drive your marketing strategy. How will you get in front of these people, build a relationship and sell to them?

For our designer, if his ideal customers are small media or publishing companies, he needs to find and engage with the executives who manage the budgets for the kind of work he delivers. That is quite a specialised and small pond and he needs to give some thought to how to reach these people. A blanket Facebook or Instagram campaign is unlikely to achieve stellar results. Targeted networking or attending industry events and conferences might be a more fruitful approach.

One way of putting it would be, ‘We get the customers we deserve’. We need to be on the front foot with this. Be clear about the business we are in and the customers we want to work with...then go find them.

www.base52.co.uk