The personal side
Being a small business owner is a tough gig on a good day – add to that being a sole practitioner in an industry full of ATO deadlines and well, even challenging doesn’t seem to cover it. Let’s not forget that almost all ATO deadlines fall smack-bang in the middle of school holidays and it really does make you wonder how bookkeeping became so female dominated and why we all thought it was ‘family-friendly’.
But with all those challenges come some really cool stuff too – like working with other business owners and being their confidant, having flexibility and being able to be around for our kids when they need us and of course getting to choose our own days and hours that we work – even if means we choose to work at 11pm instead of 9-5pm.
I’ve been in this awesome industry now since 2002. Initially, as an employee for a bookkeeping company and then in 2006, I started my own bookkeeping company: Legally BAS. When I started Legally BAS I was very clear that I never wanted to hire anyone… well, that lasted less than a year because I just had so much work, and so for many a year after that I went on a merry-go-round of growing, shrinking, hiring, sacking, working like a manic, covering for staff while they took school holidays off (and I put my kids in vacation care), earning less money than my staff, exhaustion, mental illness, divorce, working with nice clients who have become wonderful friends, working with crap clients who don’t value what we do, missing school events, having no work, having too much work, and the list goes on and on.
About two years ago I became a sole practitioner again and to be honest they have been my favourite and best two years yet. The merry-go-round is less volatile and much more enjoyable, less stressful and dare I say it — significantly more profitable too. In fact, FY17 has been my most profitable year ever. My sales were the same as when I had four staff working for me and my personal take-home income was almost three times more – and all this while I had a tough ‘personal’ year. This led me to do some soul searching as I wondered how did this happen? How, when I had almost a month off work sick, then my partner had a heart attack, then he moved to Melbourne, so I travelled to and from Melbourne on alternate weeks, and then we broke up – how did I manage to go through all that and yet make so much more money and I’m not stressed?
The business side
My findings were surprising, at least to me they were and I’m happy to share. Here are three of the things I realised and changes I made to my sole practitioner business in the last couple of years that I believe made the difference.
Value-based pricing or fixed pricing: Now I know you’re thinking this is over hyped because I know I think this too. However, what I realised is that it doesn’t have to be an all or nothing. I’ve found that only about 40 per cent of my clients are suitable for fixed fees and more importantly only a few of my services are suitable too. Once I realised that it doesn’t work for every client or every job, I just implemented it for the clients that it is suitable for. So who does it work for? For me it was simple – only those that value what I do. However, the secret is to absolutely still keep track of how much time you spend on each of these clients so you can test and measure and re-evaluate regularly.
The best thing about value-based pricing for me wasn’t the profit – surprising it was simply just spreading customer payments over 12 months that made the world of difference. Because I measured, I realised some of my jobs were costing me money, some were making me money but either way on the first of the month I always had a steady flow of cash coming into the bank account that I could rely on – especially in January which in the past was my really ‘tight’ month cash-wise.
Don’t try to be big – embrace small and just do it really well. We are so used to hearing that we need to employ staff and leverage off them and trust me, I get that theory, but that’s all well and good if you get the right staff, can keep them fully utilised and you aren’t paying them a fortune. In reality, what really happened for me is that when I had staff, I was always looking for work for them to keep them busy so I wasn’t working to my capacity which was costing me time and money. No staff has meant fewer resourcing issues, I can focus on doing what I do best and I’m less stressed so I’m enjoying my business more.
Big is not always better. Big does not equate to more profit. Big does not mean better customer service. Being on my own these past two years has been extremely profitable and I know I’m giving my clients better service because they’re getting my full attention.
Utilise technology. This is an interesting one because I’ve always utilised technology in my business and I’m always encouraging clients to as well but now I’ve really embraced utilising technology on my business. Up until recently I had an administration person helping me with taking appointments, confirming appointments, chasing money, doing proposals, etc. but now I have no one and yet I’m seeing more clients, I have more appointments and no one is managing it because it’s all automated. Here are my top four programs that I use and recommend you do too if you’re not already:
Practice Ignition. PI is life changing. I can now get out a new proposal in minutes, it integrates with my QBO file setting up the customer, sends the invoice into my QBO file, takes the payment as and when I tell it to and even enters the payment into QBO for me. It looks professional, it is professional, my clients love it and I am doing virtually no administration and getting paid quicker.
Calendy. New and existing clients can now make their own appointments via my website. They just click on the book an appointment button from my website and I have set up different appointment types for them to choose from. Calendy looks up my outlook calendar and only gives them options based on rules I’ve set up for each appointment type. Instead of me spending time trying to organise appointments the client does all that themselves – best part is it also sends them reminders and puts the appointments in both our calendars too.
Survey Monkey. I used to think that was just for doing traditional surveys but I use Survey Monkey to gather information about all sorts of things. One of my favourites is that all new clients automatically get a New Client Information link when they book an appointment through Calendy. In this survey I gather all of their information so even before I’ve met or spoken to them I know their business structure, why they are leaving their old adviser, what they are looking for, their turnover, current system, number of employees. It’s great because it means I’m prepared when I meet them and I also know their pain points so I can be sure I address them in our meeting.
GovReports. GovReports is a must have in your toolkit of systems. Truly an anywhere, anytime product that is great for TPAR, Payment Summaries, BAS/IAS’s and even tax returns. Best part is it links to almost all software systems so does all your BAS/IAS data entry for you and even if the ATO is down you can still work using GovReports and it will queue and send later – add it’s feature of outstanding/overdue lodgements and you’ve got everything under control.
Each of the above individually improved my business but together they’ve changed my world.
The key to success is continuous improvement. Continuously test and measure and tweak. If it’s not working ask yourself ‘if my business could talk, what would it say it needs?’
Debra Anderson, Anderson Tax and Consulting