3 Steps to Business Clarity amid the Sea Change in Accounting

With three months to go in 2012, it’s a good time to take stock of where we stand for the year, plus re-group as needed before the 2013 busy season is upon us.  With so many changes in software, politics, tax laws, and global standards, it’s pretty easy to feel a little disorganized.  Here are three steps to help us take stock of our foundational business goals, re-evaluate our big picture, and get us centered as we enter this last quarter.

Step 1: Is My Business Model the Best One for My Business?  

The “default” business model in an accounting practice is one where solo or multiple accounting professionals bill traditional services of tax preparation, bookkeeping, controller services, and/or software consulting by the hour.  It’s not the only business model, and maybe no longer the best, but it’s certainly the most pervasive.

The question is, have you implemented your business model because you’ve always done it that way, because you’re not aware of what else there is, or because you’ve never thought about it before?

The repercussions are huge, because if you’re not in the right business model, you could be struggling financially.  Not every business model is profitable in the accounting profession.

To me, a business model includes:

  • The mix of services you offer to the client (tax preparation, bookkeeping, controller services, and/or software consulting, etc.)
  • The delivery methods you use to deliver those services (onsite, remote, virtual, customer interaction, etc.)
  • The pricing methods you use to price the services (hourly, fixed fee, packages, subscription, etc.)
  • The resources you use to deliver the services, including staffing and tools (software you support, your team, and much more)

Certainly, all of these areas offer a wide variety of choices so that we can differentiate our businesses and tailor our business models to fit our needs and our clients’ needs.

At this stage, take into consideration how much you want to work, what skills you’re best at, and what clients you serve best.  Also consider how much you want to be compensated for what you do.  As an entrepreneur, you should be paid twice, while employees should be paid once, and your model should reflect that.

Take a look at each of the bullets above, and select an ideal model for your business.

Step 2: Remember Your “Why?”

When you first started your business, you likely wanted to do something better than what you previously experienced.  What was it?

What part of your business is it that keeps you energized, motivated, and feeling great about what you do?

Is there a part of your business that you simply don’t like, that is too much learning curve, or that is just plain boring for you?  It may be that it’s not connected with your “why.” Perhaps you can delegate, outsource, or simply stop doing it.

With all of the stress that we have in our profession, it’s essential to keep grounded in our “Why?” – i.e., why is it we do what we do?  If we don’t have a strong “Why” (and it has to be about more than money), we’re likely to end up working for someone else quite soon.  The pressure and risk of entrepreneurship must match the rewards, whether they are financial or emotional, or hopefully both.

Align your “Why” with your business model, and you will feel less stress and much more positive about your business.  Without it, prospects and clients will see that you’re tired or burned out, and they may start looking for someone who isn’t.

Step 3:  Make Your Numbers

To make your numbers, there must be a plan, and I know: we are the cobbler’s children – without shoes – in this area.

I recommend making a revenue plan first instead of an entire budget.  Write down the mix you want, and this will give you clarity and direction in almost all your other business areas:  marketing, staffing, technical training, production, and more.

For me, this step is hard, but it makes me realize all the work I need to do in order to launch enough programs or make the volume I want to grow my business.  It’s much better to know what we need to do than to be reactive and come to the end of the year and wonder what happened.

From Chaos to Clarity

Completing these three steps:  1) your business model, 2) your “why,” and 3) your revenue plan can help you gain clarity about your business. (It’s YOUR business, not your client’s, as I say often in Accountant’s Accelerator.)  My goal is to help you move from reactive to proactive so you can have the business you dreamed of when you first started making plans for it.

Try these three steps on a quiet early morning to gain clarity about your business.  And if you’re looking for more guidance in this area, my series “Business Clarity” will be a part of Accountant’s Accelerator 2013.  You can find out more here:  http://fillyouraccountingpractice.com