When you left your job and started your own accounting or bookkeeping firm, a freedom practice was probably what you had in mind, but a monster business was what you got.
The reason so many accountants and bookkeepers end up with monster businesses is that traditional firms have become commoditised and thus forced to compete on price. The result? You’re overworked, underpaid and have very little time for yourself or your family.
But what if I told you there was a model that could give you time and financial freedom? Many people believe that there are only two ways to make money – either getting a job or starting a business – but there’s actually a third option: a freedom practice.
What Is A Monster Business?
A monster business is one in which your margins are low, forcing you to work with many clients. Much of your income goes towards employing and managing a large team. You work long hours and are frequently questioned on price by your vampire clients, who want to take as much of your time as they can whilst paying you as little as possible.
Here’s an example of a monster accounting business:
- One million pound turnover
- 1000 clients paying £1000 per year for compliance
- 20-40 staff
- Not agile
- Lots of systems and software
Your clients see your business as a cost rather than an investment and as a result, neither you nor your staff truly enjoy your work. When you’re emotionally and financially drained by vampire clients, it becomes almost impossible to work at the best of your ability and provide truly stellar service – especially when your clients wouldn’t appreciate it anyway.
Far from the freedom lifestyle you dreamed of, you spent your time desperately trying to keep your head above water. This struggle to stay afloat has left you exhausted.
A Freedom Practice
Of course, freedom means something different to everyone but working fewer hours, earning more money and having more control over the clients you accept is certainly a good enough definition for me.
Whereas a monster business is centered around selling a service, a freedom practice is built around the expertise of the owner. The rest of the staff are there to support and facilitate but not to serve clients. Therefore, a much leaner team is required than with a traditional business.
A freedom practice has low overheads, fewer staff members and fewer clients but far greater profit margins. After the initial hard graft, you will spend far less time working and yet enjoy far more profit.
Now, not everybody can create a practice but accountants, bookkeepers, CPAs and outsourced CFOs certainly can by offering advisory, rather than compliance.
A freedom practice might look like the following:
- £1 million turnover
- 100 clients paying £6,000-10,000 a year for advisory
- 2-4 staff
- Streamlined systems and minimal software
But What About Retirement?
I often see accountants and bookkeepers being told to take their name off the door so that they can sell their monster business for a lottery-win figure upon retirement.
A practice, however, cannot be sold off when you retire.
Still, this isn’t the sacrifice you may initially consider it to be.
Traditional accounting and bookkeeping firms are no longer worth lottery-win figures upon exit, and their value is only likely to further decrease between now and the time you retire. A well-built freedom practice, however, will make you plenty of money along the way, allowing you freedom both now and during retirement.
Can You Have Both?
It is possible to have both a business and a practice. Just look at Richard Branson! He runs the Virgin Group as a business but also owns his personal brand as a practice. He writes books, runs retreats and gets paid unthinkable amounts of money for public speaking engagements.
Running a practice is both more profitable and conductive to a freedom lifestyle than a business, but it is possible to have both.
It’s Closer Than You Think
If you are stuck running a monster business right now, a freedom practice may seem like a million miles away. However, trust me when I tell you that it’s closer than you think. As an accountant or bookkeeper, you already have the capacity to deliver enormous value to your clients through advisory, even if you have never actually done so before. By selecting a hunting niche and establishing your authority in that area, you can begin to attract clients who are willing to invest in your advisory services – and it’s possible in as little as three years. Uplevelling is within your grasp.