Elevate your practice Amanda Armstrong, General Manager NZ Greg Sheehan, CEO RightWay
Greg & Amanda presentation - Xerocon NZ 2013
Oct 21, 2014
RightWay CEO Greg Sheehan and Xero New Zealand GM Amanda Armstrong presentation from Xerocon NZ 2013. Xero is beautiful online accounting software that connects small businesses and their accountants together in the cloud.
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Elevate your practiceAmanda Armstrong, General Manager NZ
Greg Sheehan, CEO RightWay
XEROCON ELEVATE
•Government rules changing
•Tech has changed the game
•Your sta! see the opportunity
•Next generation firms: new competition.
A changing environment
XEROCON ELEVATE
The SME market is growing up.
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“Can we do a quick call on Skype about a few things?”
“I need a virtual CFO”
“I want access to my accounting, wherever I am”
“Can you help me develop a strategic plan?”
“We need to fund our growth; can you help me raise capital?”“When should I hire my next employee?”
“Board meetings with a focus on strategic development & growth”
“I need monthly management reports”
“2 year rolling tax forecast”
“Monthly cashflow forecast, looking out 6-12 months”
XEROCON ELEVATE
The average fee per client has dropped $45, or 2%.
Compare 2008 to 2012
Figures from GBU Report
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The total number of clients is about the same.
Compare 2008 to 2012
Figures from GBU Report
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Total employees per firm has dropped 8.3%.
Compare 2008 to 2012
Figures from GBU Report
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Profit per Partner is down $23k or 10.5%.
Compare 2008 to 2012
Figures from GBU Report
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The better firms are much better
Average Upper Quartile Variance
Average Fee Per Client $1,958 $2,863 46% better
Revenue Per FTE $111,616 $128,485 $16,869 better - FTE
Revenue Per Partner $590,656 $908,427 54% better
Profit Per Partner $196,947 $301,609 $104,662 better
Figures from GBU Report
XEROCON ELEVATE
It gets scary...
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• The better firms: $128k revenue.
• $80/hr recovered. Charge out $150/hr.
• Recovery is 53% (Monday, Tuesday & half of Wednesday).
Sta! time
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• The better firms: $2863 per client ($238 per month).
• Minimum fee should be $250/month for a normal business.
• A large number of clients pay way less than this.
Low value clients
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• The better firms: $300k profit per Partner.
• $250 per hr x 1600 hours per year: $400k revenue.
• Sta! are supposed to provide leverage to a better profit!
$300,000 < $400,000
XEROCON ELEVATE
So why the di!erent results?
XEROCON ELEVATE
A top firm understands, can articulate, and can deliver
Value
Greg SheehanCEO, RightWay
XEROCON ELEVATE
Business adviser?
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Time hourly rate feex =
"client perception of value
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Billing is di!erent to value“How long would you like me to spend on your GST rec?”
XEROCON ELEVATE
Billing is di!erent to value
“Is that good for your business?”
“What do you think you could do better?”
“How successful was last month?”
“How can you grow revenue by 10% this year?”
“How long would you like me to spend on your GST rec?”
XEROCON ELEVATE
What do customers want?
XEROCON ELEVATE
• Low cost compliance
• Help to grow
• No surprises
• Time with you
• Depth of talent
What do customers want?
XEROCON ELEVATE
What do they often get?
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• Problems, not solutions
• Surprises
• Lack of helpful advice
• Inability to change
• Reactive & Historic
• “Wayne”
What do they often get?
XEROCON ELEVATE
• Change or improve
• Or die
Who’s Client #1?
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The regional partner
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A top firm understands, can articulate, and can deliver
Value
XEROCON ELEVATE
Level 1: Lay the foundations
Winning the value game
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What you need to do
• Build e"ciency with the single ledger • Get all your clients on Xero • Ledger # Cashbook # Business (if you want to)• Use Report Packs to create even more e"ciency.
Level 1: Lay the foundations
XEROCON ELEVATE
What you don’t need to do –
• Go out and sell lots of stu! to clients• Move away from time & cost• Fundamentally change o!erings• Develop bundles• Move to a job-centric model
Level 1: Lay the foundations
XEROCON ELEVATE
Level 2: Create a value-based practice
Winning the value game
XEROCON ELEVATE
Look after your #1 clientCreate capacity, replace yourselfEmpower your teamExecuteThe ultimate client meeting (with your clients)
Level 2: Create a value-based practice
XEROCON ELEVATE
Look after your #1 client
• Develop your Strategic Plan• Establish the Board and have regular meetings• Independent Chairperson • Set up the right business structure
Level 2: Create a value-based practice
XEROCON ELEVATE
Create capacity
• Become the CEO, appoint a great COO• Have functional heads• Extend the Single Ledger
- Practice Manager, Workpapers
Level 2: Create a value-based practice
XEROCON ELEVATE
Empower your team
• Culture starts at the top• KPIs for the team, aligned to strategic plan• Individual and team recognition, rewards• Proud and connected• Team functions
Level 2: Create a value-based practice
XEROCON ELEVATE
Empower your team
• Training• Involve them in the creation of the service o!ering• Tools
- Software & apps- Hardware- Fast internet
Level 2: Create a value-based practice
XEROCON ELEVATE
Execute
• New firm structure, reporting lines. • Marketing plan & rebrand – ARTICULATE your value • Next generation product o!ering
Level 2: Create a value-based practice
XEROCON ELEVATE
Thefundamentals
XEROCON ELEVATE
Build e"ciency with technology.
The fundamentals
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Look for lower-costways of doing di!erent work.
The fundamentals
XEROCON ELEVATE
All clients should get management reports.
The fundamentals
XEROCON ELEVATE
All clients should pay monthly.
The fundamentals
XEROCON ELEVATE
See clients at least 3 times a year.
The fundamentals
Beautiful accounting software
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