


What’s my role as an accountant? I used to say I help ambitious business owners scale their business. But the other day I had to rethink this definition.
I had a regular review session with a client but this time he brought his partner and youngest child.
“How do I afford to buy a new vehicle and hire a full time employee?” he asked.With a growing business this would be a natural next step… but I sensed something else was driving this question.
In an industry that has been particularly affected by the recent struggles of our economy, this one man band almost doubled his revenue.
As accountants we are trained to celebrate growth…. But this growth had come at a cost.
Weekends spent doing quotes and invoicing instead of making memories with his young family.Evenings spent meeting potential new customers.Every spare moment spent creating content and marketing to reach an ever wider audience.
The numbers showed he was doing everything “right”. But the cost was too high.
“Why do you want to?” I asked.
He wanted more time with his family. He wanted more space to breathe. He wanted more evenings having dinner with his kids and relaxing with his partner.He wanted more mental and emotional bandwidth to be present instead of always thinking about work.
The solution he had in mind was to buy another vehicle and hire a full-time employee. Which was an understandable conclusion, he was thinking: more capacity + someone else on the jobs= more time for him.
But I wasn't convinced it would actually solve the problem.
When I looked at the last 12 months invoices I saw an option he hadn’t yet considered.
By saying no to jobs under a set value he would reduce the number of jobs he took on by 40% and still make over 90% of his revenue.
He could get everything he wanted by simplifying his business. Not scaling. (Which might not be the right answer forever, but whilst his family is young it makes sense).
The reduction in travel, calls, meetings, quoting, invoicing, chasing payments and actually doing these smaller low value jobs would give him the time back he was looking for, and we could easily close that 10% gap with just one extra ideal, high value client a quarter.
The other option was to almost double his revenue. And when I asked him how that many more customers, quotes, jobs, invoices felt, the answer was obvious!
Business owners often think they have a capacity problem when they actually have a complexity problem.
The process of simplifying is the business equivalent of a slingshot.
Before you soar, you pull back. Simplification allows time and space for streamlining, improving, perfecting the way a business operates. Over time a store of potential energy builds that when released propels the business forward with a momentum and velocity that far exceeds its previous trajectory.*
So I have a sneaky suspicion that at the end of the next 12 months he will still have grown his business, with less time and less effort. And then he will be in an even better position to scale and take on that first hire.
*I am an accountant not a physicist, I clearly have no idea about the actual science of a slingshot.
If you’re ready to soar, or if you want an extra set of eyes over your business before you make your next decision, book a call with Amy. See how she can help with Advisory here.
We’re Bring On Monday, an accounting and business advisory team for NZ small business owners (turning over $250K - $10M) who want more than a filing service.
