The Built-to-Sell strategy is universal because whether you intend to sell in the short term or not if you have a Built-to-Sell business your firm will be:
· More Profitable
· Less Stressful
· A better place to work
· Provide a better service to customers
If you have a Built-to-Sell Firm, the firm will be less dependent on the owners and unique personalities. It will be a self-managing firm.
Even if you do not want to sell in the short term, one must exit eventually, so building a Built-to-Sell Accounting Business makes sense. Start early and have a more saleable business when the time comes.
Here are the Seven Steps to creating a Built to Sell Accounting Firm:
1. Develop Products and Services with the Potential to Scale
Providing high-end consulting and premium-priced advisory services may be an attractive way to generate profits and high fees but it is harder to develop these services in a way that they are not personality or unique ability driven. It can be harder to scale these types of services.
Level 1 Services like bookkeeping, payroll, and VAT are definitely scalable services.
Level 2 Services like accounting, tax and compliance are definitely scalable services.
All products and services are scalable but some are easier than others.
2. Identify the Ideal Customer to Buy the Products and Services
You don’t need to sell to everyone. You just need to connect with those ideal customers who want to buy the products and services that you are delivering.
There are some people we are meant to serve and some not so much. It’s an accounting business rather than an accounting practice. The term ‘practice’ almost has connotations of public service. It is a commercial business, not a community support service.
3. Create a Positive Cashflow Cycle
Getting paid in arrears and having cash tied up in debtors and WIP is not attractive to a prospective business purchaser so we need to create a cycle whereby cash is collected as the service is delivered.
More importantly, retrospective billing, depreciating work in progress, and chasing debtors aren't something you want to do in your business so we need to look at a better way of doing things.
Fixed pricing, progress payments in advance, direct debits and memberised subscription models are all ways of creating positive, consistent and reliable cashflow cycles.
To address this you need to be honest about where you are and begin taking the steps to get to the point where you have cash flow cycles that add to the value of your business as well as ensuring there is always plenty of excess cash in the bank.
4. Build the Team
If your business is going to be a saleable, scalable business that is not dependent on the owner and not dependent on unique personalities and skills you are going to have to build a team.
The team doesn’t necessarily need to be all A-Players but we need to build a winning team. We need to build a high-performance team. Accountants don’t always tend to be the greatest natural people managers so this is an area of our Built-to-Sell business that we need to pay particular attention to.
You need to create an organisation chart that makes it clear who is responsible for what. Everyone needs to be clear on their role in getting the overall result for the team and what their specific deliverables are on a daily, weekly, monthly and annual basis. You then need to create a system for identifying and attracting ideal team members. This is called WHO Hunting.
5. Develop a System to Deliver the Result
Whether you like it or not what one does as an accountant and bookkeeper has a lot of repetition in it. It’s the same things for the same clients over and over and over again. It’s the same things for different clients over and over and over again.
Accounting businesses are businesses that can benefit massively from creating Standard Operating Procedures (SOPS).
Just imagine if your business had a Procedures Manual just like a Mcdonald's Franchise that set out clearly “This is how we do things here”.
Every job, every task, every role, every new team member, every existing member, everything with a Standard Operating Procedure that sets out how things are done in your firm.
Identify all the processes and procedures in your firm. Adopt a template or methodology for capturing standard operating procedures. Start capturing them one by one with the collaboration and input of your team.
6. Develop a Single Focus Growth and Sales Process
With clarity around the products and services you deliver and whom you deliver them to. Based on a positive cash flow cycle. With a team and a system that delivers the result now, we can begin the scaling process.
This is not just about marketing or sales. This is about building a system that continually attracts your ideal customers. From a Built to Sell perspective this adds massive value to your business. If someone buys your business they are not just buying your client list. They are not just buying your cashflows. They are not just buying your team. They are not just buying the intellectual property and systems as to how you get it done.
They're buying a cash generator that keeps attracting new ideal customers all the time.
7. Incentive Scheme for Senior Team Members
Whether it is to relieve pressure in your business or whether it is to facilitate your exit or whether it is to sell your business to a third party you need to have a stable team led by senior team members who can get the job done without you and your partners.
You’ll want to know that they are locked in and invested in the business for more than just a basic salary.
Do you have the senior team members and do you have an incentive scheme for them so they will stay on for more than a minimum notice period? So they will stay, transition, and sustain the business if you ever sold?
Built-to-Sell is the universal strategy for accounting businesses.
To learn more, sign up for ProfitPro Live. This is a 2-day conference where Des O'Neill guides you through the built-to-sell formula. Join the waitlist here.