Implementing "Monitoring Performance" helps SMEs to "scale up"
Peter Towers
Founder of ESS BIZTOOLS Pty Ltd | Certified Public Accountant | Business Advisor | Mentor and Coach
This is the fifth segment of the discussion with Andrew Geddes* about important issues currently facing the Accounting Industry.
(*Andrew Geddes was the co-founder of the Financial Management Research Centre (FMRC) at the University of New England, Consultant and the Chair for ten years of ASX Top 200 company, Greencross Ltd.)
Previous segments are below:
Advisory Board
Another example of what you could do is to select 10 clients and move onto their advisory board by offering them proactive advice and support that they can see is beyond taxation. If you could attract 10 clients for an annual fee of $35,000 each for work on the Advisory Board, that’s the type of work that Andrew is undertaking by working 5 mornings a week.
You can sit on your clients’ Advisory Boards and help develop their financial budgets and plans. That puts you in a position to start monitoring how the business is performing. In some instances, the client might have an employed accountant, but there could be a role for you as an External Advisory Board participant. Why can’t an accountant play this type of role and put $350,000 on top of their current earnings, by being a specialist advisory board person and bringing their expertise to the table?
There will be some skills that you will have to learn. I suggest that you look at two areas: the first is scaling up. If you are sitting on an Advisory Board assisting in running the annual strategic planning meeting, you will need to be able to show what the business will look like in 3 to 5 years’ time. This will put you in a position to encourage the leadership team to look at revenue, expenses, profit, borrowings and the services being provided to customers and to help your client decide where they’re headed, what’s their purpose, what do they need to focus on, what are their values?
This information can be shared with the senior leadership group.
As the accountant/business advisor, you’ll need to assist in identifying 1-3 items that need to be improved in the next quarter – what does the company have to get nailed? Look to the key items relating to:
By asking these types of questions, you can help your clients create their senior leadership teams, identify key business improvement projects and ensure they meet regularly to discuss them. That’s what an external advisor does. Advisors play a role of director, coach and morale officer. As an advisor, they don’t tell their clients what they can or cannot do, but if there is tension between the players, they help them attack the issue, not the person. Advisors are the ‘voice of reason’. They say, “Let’s put it on the table and look at what’s causing the pressure or angst. How can we fix it so that the team works better?” In this role, you’re the oil between these personalities. You keep everything running smoothly.
If you’re interested in looking at “Scaling Up”, you should read the book by Verne Harnish, “Scaling Up”. Read the book and go and learn how to implement its methodology, so you’ll become a valuable external advisory board participant. There is another book that you could also read “Measure What Matters” by John Doerr.
Measuring Performance
In measuring a business’ performance, Andrew Geddes says you need to look at the business objectives.
One of the key results that will tell us whether we have achieved those objectives is the Budget.
The Budget illustrates there’s a turnover objective and there is a profit objective and, if we achieve these, we have achieved two key objectives for the business.
Advisors should also look at marketing, product development and people management.
If you’re going to measure accurately within the business, you need to know who’s going to do what, when and how.
You should look at working with your team in the annual performance review. These reviews used to happen but they’ve been tossed out by many big companies in the last 10 years because teams didn’t like them – they tended to be political exercises.
Having a regular discussion with their supervisor about these questions is Continuous Performance Management. This is where you have conversations about what a person’s role is and their objectives, providing feedback and recognition. The best form of recognition is – “Thank you very much. That’s truly good. The way you’ve handled that is in line with our development, direction and core values. We really appreciate your input.”
I suggest that you sit down with people and ask, “What are you working on?”
“What are your objectives and key results?”
“What help do you need from me?”
The accountant who sits on a Business Advisory Board can help to coach the Managing Director. The Managing Director, in turn, can undertake this type of coaching with their direct reports and this type of coaching can flow on down to the team members.
Communication through most small businesses is far better than it used to be. There is now better alignment and people have a greater purpose and sense of belonging.
Things are changing to a performance management, regular communication style, which is what team members are wanting based on the research that is being done.
So it’s two skills – “Scaling Up“ and “Setting Objectives” that create key results – it’s about looking forward.
Discussions about remuneration should be separated from this process: What we’re doing here is about alignment of direction, improvements and transparency.
It comes back to a “pattern of meetings”.
You might have a daily five-minute stand-up with your team.
You may have a weekly review with your senior support person.
And the Managing Director could also sit down regularly with his/her direct reports.
Peter Towers, Managing Director of ESS BIZTOOLS, made the following comments:
“Scaling up is an objective for many SMEs – but most SMEs will require accounting assistance on ‘Performance Management’, ‘Advisory Boards’ and the ‘Scaling up Process’.”
“This presents great opportunities for accountancy firms and your aspirational clients will be grateful for your support on their ‘Scaling up Journey’.”
“Another significant benefit is that your team members will be engaged in interesting and challenging work, which will significantly contribute to your firm’s TALENT ATTRACTION AND RETENTION.”
Peter Towers is available for telephone discussions and Zoom meetings, to discuss the strategies that your firm could implement to ensure that your firm delivers Business Advisory Services to your CLIENTS.
To find out more, give us a call on 1800 232 088 or email peter@essbiztools.com.au. You’re most welcome to visit our website – www.essbiztools.com.au.
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Next Issue
The “Dawn of a New Era” series of Accountants Minute will continue next week, with “Creating new services for your clients and your firm”.
ESS BIZTOOLS Product Packages
Starter Package
$1,529 (including GST) for a 12-month subscription (normally $2,100). Monthly payment is also available at $149 (including GST), normally $197. Find out more and subscribe below.
Advanced Package
$2,519 (including GST) for a 12-month subscription (normally $6,500). Monthly payment is also available at $239 (including GST), normally $596. Find out more and subscribe below
Financial Forecasting Package
o 52 week business enhancement system
o Virtual CFO services templates
o Research and Development product system
o Business Plans
o Raising capital advice
o section 708 Corporations Act
o Early Stage Innovation Company Capital Raising
o Crowd Sourced Funding Equity Raising
o Corporate governance mentoring
o Board of Advice
o Board of Directors
o Personal Property Securities Register System
o Charge out rates calculator for Tradies to earn targeted profits
o Charge out rates calculator for Professionals to earn targeted profits
o Retail industry mix of stock categories with mark-ups to achieve targeted profits
o Risk management
o Strategic Planning
o Succession Planning
This package would normally cost $11,000 (including GST) for a 12-month subscription.
To celebrate the new financial year, we are offering this package for $6,199 (including GST) for a 12-month subscription. Monthly payment is also available at $578 (including GST).
NOTE: NO GST payable on the PlanGuru software package.
Find out more and to subscribe below.
Want to know more?
Visit www.essbiztools.com.au.
If you would like to have a discussion about how this concept of virtual CFO services can be supplied by Australian accounting firms please ring our Managing Director, Peter Towers, on 1800 232 088 and we will arrange a complimentary 15-minute Zoom meeting to discuss your firm’s position and to give you our advice.
We believe that this is the blueprint for the delivery of an enhanced range of services by Australian accounting firms to assist SME businesses to add value to their businesses and to assist accountants not only to attract but to retain outstanding talent who want to be involved in the delivery of “real accounting services”.
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