Finola's Story - Part 1

Let me set the scene going back nearly 15 years when I bought Landers, a small practice in Toddington just off the M1, from a retiring Sole Practitioner. The business had a good client base along with lots of issues to sort out. This is what we were faced with;

  • No budgetary control on jobs
  • No systematic billing of clients
  • Bad debts
  • Huge levels of Work in Progress
  • Uncertainty over whether Work in Progress was actually recoverable, no one had dared to look too closely and tried to bill it out for fear of the unknown !
  • An overdraft facility that was permanently at its limit
  • Profit per partner running at only £40,000 a year
  • No available working capital
  • Partners working in excess of 60 hours a week
  • Significant balances on Partners capital accounts as there was never the available cash to draw it down
  • No real job satisfaction and a feeling of continual 'fire fighting'.
  • Work not being fun!
  • Failing to deliver the level of service that clients deserved
  • De-motivated and disillusioned staff and a real recruitment problem as who would want to come and work for a firm like this one.

After 10 years this is what Landers had become;

  • Partners working a 4 day week and enjoying 10 weeks holiday a year
  • Positive cashflow and no overdraft
  • Negative work in progress as clients were paying in advance
  • No debtors issues or bad debts
  • A team of staff who were happy and yes we knew that as their happiness was measured weekly!
  • Available working capital to grow the business and invest in its future
  • Partners able to draw profits.
  • Turnover had increased by 150%
  • The number of partners had doubled and Profit per Partner had increased by 250% compared with what the original partner was making when the firm was bought out
  • The number of clients had remained constant despite some leavers and joiners.
  • There were only 140 clients with an average annual fee of £6,500
  • Work was enjoyable and there was a clear vision for the future which everyone, including the team shared and were part of.
  • Clients were delighted at the level of service they received and would say so in writing
  • We had won lots of awards, such as being named as the Accountancy Age Firm of the Year, AVN Regional Firm of the Year and Regional Rising Star Award Finalists
  • Judges in the 2006 Accountancy Age Awards said;

' The Firm is absolutely excellent. The work ethic stands out a mile. This is a firm that cares about its clients and cares about its people. The professionalism and dedication of the firms at this level is astonishing and if I had to hire one it would be Landers.'

In 2007 I was able to exit the business and dispose of my 50% equity interest in Landers at a premium and at very short notice. In fact, I effectively made myself redundant in 3 hours when I was forced to leave at short notice to start treatment for cancer. Thankfully I am now fully recovered and pursuing a different career helping other accountancy firms. Landers continues to thrive and it cannot be underestimated how important it was to have built a business that was not overly dependant on an owner. Systems were in place to ensure the business could continue without me and to provide me with a respectable sale value. In my experience this is rare - especially for a small practice, but it is actually one of the most important keys to our success.

In part 2 of this article I will explain what we did to achieve all of the above.

In addition, if you are a partner and email me on This e-mail address is being protected from spambots. You need JavaScript enabled to view it and I will give you even more details of exactly how we made it all happen and give you my thoughts on exactly what you can do to make it happen in your practice too.

 

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