Welcome to the Escaping the Accountants Trap podcast. It's a podcast to help accountants, CPAs and bookkeepers escape what we call the accountants trap. It's where you're stuck working with low value and high demanding clients. But at the same time, you can't raise your fees because you have a ton of competition. Well, how do you escape the trap? One way is the topic of today's episode, and that's increasing the value of your accounting or bookkeeping practice.

To help me with the discussion, I've invited Christine Nicholson and an award winning professional business mentor, author, and speaker who has helped businesses for the past 30 years. She's an accountant, but specializes in exit and succession planning for accountants. Christine, welcome to the show. Oh, thank you for having me. Adam, it's really. I'm really pleased to be here.

Yeah, I'm excited about this because one of the things that you advocate for is thinking about your exiting as you're working your your business, growing your business. So tell me about that. So one of the things that always amazes me about business owners, doesn't matter whether it's accountants or business owners, is you get started and you get your first customer and that's your first challenge.

And then your second challenge is getting paid by your first customer, and then it's getting your second customer and so on. But parallel to all of that, you really got into business for something more. You you know, you creating a business is because it's more than a job and you spend all this time building value in the business without actually ever taking time to look at what that value is, and also to look at, well, if I'm not in the business, what happens there?

And when clients and accountants and their clients. So so here's the thing. This is a twofer. Because if you're doing this in your practice, you can do this for your clients, okay. But when you start looking at the value of your business and then working on all the things that increase the value. Well, again, it's another twofer because you do increase the value, but invariably you're doing things that increase the profitability of the business as well.

Okay. But if you're doing it for your own practice, you're literally role modeling the way for your own clients because you might not have thought about this up until right now, neither of your clients, and they are literally crying out for a awareness of what they should be doing to increase the value of their business, as well as their profitability, etc..

Yeah, and most accountants in practice, as you know, are so busy doing the doing that they can't then they need help to, to find those things that add more value. And particularly the advisory seems to be a really hot topic at the moment. Yeah, absolutely. So I want to jump into the value. What do you mean by value increase in the value of the accounting practice as well as the accountants clients?

But real quick let's dissect a little bit more. The, the idea that business accountants, they essentially own a job. And I'm not sure that many accountants realize that when they start. But somewhere after a few years, they realize, well, I can't really take a month off because I own the business. Yeah. And and that that's a real key weakness of a lot of businesses.

Even if you've got staff, if you're the single point of failure, if you're the decision maker, if everything seizes, if you're not there, then you have really got a job with a, overhead burden rather than a business. And people often think like, I've done it myself. I've set up my own businesses in the past and I work with a team now.

It's really easy to think nobody can do it like me. And, you know, in some cases, that might be true. I have to say, in accounting, I like that because there's plenty of accountants over. But, you know, they it's easy to think, oh, nobody can do it like me and nobody cares enough about it other than me. Well, if you start delegating some of those tasks and making yourself dispensable, your business will be worth more.

And the biggest thing I hear is I hear this. I'm never leaving my business. Well, I'd like to have. I'd like to know what you've got. So that's going to create immortality. I'll happily sell that, for you. Will leave your business one day. And isn't it a heartbreaking, tragedy if you spend years building up your practice only for you to to then start saying, well, actually, what I'm going to do is I'm going to let my practice drift away so that I can retire.

It's like you've spent all that. It takes so much energy to get there. Yeah. The a building and a little resilience building and a team that can actually make decisions because you've set the parameters and, and building and processes and actually engaging with your clients in more than just compliance work. Like, I could I could spend hours talking about this.

But as a character like, you know, as accountants, you've all got it. It's just getting ahead of the day to day. Yeah. And spending just a little bit of time. So I'm just. I didn't realize my laptop wasn't plugged into power. This sucks. But, yeah, just spending a little bit of time, and it doesn't take an awful lot to on that.

That your exit value and your ability to leave a legacy and let other people run your business for you so that you can act like a shareholder at some point and just get the dividends which will be paying you for all the hard work that you put in in building the thing in the first place. Yeah. I mean, fundamentally, your practice is a business.

Most accountants don't do it as a hobby. Your clients are operating in exactly the same way they're operating a business. It's invariably not a hobby. And you've got to start treating the your business as a, as a a legal entity that is going to provide value for you. Yeah. Clients. So most of your clients as an accounting practice, most of them will be using their business as a form of their pension provision.

It will be going either into their pension fund or I think in the US you call it 4 or 1 K, whatever it is, it's going to fund their retirement and they have no idea. And they've made no plans on how to unlock all of that money to enable them to retire. Yeah. And if you start working on it sooner rather than later, you are going to end up with more options and generally more money and an easier exit.

And you're going to be able to plan it better. Because the sad fact is that whilst everyone likes to think they're going to live forever, nobody does. And more than 50% of all business owners in all sectors leave their business because of unexpected circumstances. And there are four that I know are really common death, disease, disability and divorce.

And these are four things that you do not plan for. That's right. So wow it's a bit like writing a will. Nobody wants to think about dying. But do you really want to think about the mess that you can leave behind if you become unable to work in your business, for whatever reason? Yeah. So I love that you're you're bringing this up because, you know, you're absolutely right.

Businesses, we tell accountants all the time that that you need to treat your business and your client's business like a machine. A machine's job is to do something specific. You know, a car, the machine of a car. His job is to take you from point A to point B, you know, the machine of A of A washing a washer and dryer is to wash your clothes.

That's the point of that machine. Well, the point of a business is to produce this cash, the produce value that you can use to to grow the value of your business, grow the value of your client's business. But the machine's job is to do something specific. And you've highlighted the fact that it would be a sad, sad day when at the end of your career, you've done all of this hard work in your accounting practice, and then at the end, you're left with nothing because there is no value.

You haven't you haven't worked the machine you haven't created, done what the machine is supposed to do. So let's talk about how to create value. What how how would an accountant do that. And and like you said, it's a twofer. How could they do that to their own practice while also doing that with their client businesses? So here's the easiest thing to increase your fees in accounting practice okay.

And that is to simply open a conversation that you don't need to be selling anything. And you can add this at the beginning of the end of a compliance conversation. So so be it. First of all, step into the meeting. You're not selling anything. So now the pressures off because you're not selling anything in the client certainly isn't buying anything.

So you just having a conversation. And I would like to think that most accountants have got clients that they actually like spending time with. Yeah. Because frankly, I'm going to give you some advice. All those clients you don't like spending time with. Get rid of them. All of a sudden your life is a whole lot better. And you've got some space for some clients that you do like to short for.

Bad clients. Yes, absolutely. So given that you typically like spending time with your clients, then actually talk to them like a human being, you know, it's not about the numbers. And I would literally say I would literally ask the question, is your company, is your business going to respond your retirement? So what kind of retirement are you looking at?

And all of a sudden that's putting the client in the future. They're pushing them into the future, which should be, you know, on sunset and roses and and you as the accountant have got a unique insight into where their business is right now. So when they talk, start talking about the future retirement and they're going to have you will be very aware of the gap between where they are now and where they want to be.

But equally some of your clients might be talking about well in 15 years I'm going to be, you know, I want to travel and all of this kind of stuff, you know, want to own a yacht. Yeah. Fastest way to get cool by the way. But you know, they've got these these dreams and these things that they want to do, but they finding that their business is wearing them down when the conversation can be, well, why are you exiting in 15 years?

Why don't we have a look at when you could leave. To get the lifestyle that that you want. Because frankly we're working another 15 years and then not having 20 years or 30 years and not having the energy to go and do those things. Yeah I'm a big fan of do things now because you, you might not have next year.

Yeah. And and so you're really just opening a very human conversation. Yeah. And it leads direct actually into the services that you can offer. There's a couple things that you've said that I really love and and I don't want to I want to make sure we don't miss over them. The first is you're having a conversation. You're not having a a sales meeting.

And first, that will I think will lower the the anxiety of a lot of accountants and bookkeepers out there because most don't like selling. I mean, we're not salespeople, but you're saying and I completely agree with business owners don't even respond to salespeople. They respond to people that care. Yeah. And if you care about their business head, who best to be, an advocate for the business owner, then their financial professional, if they care, then the business owner is going to want to spend time with you and then moves.

That moves on to the second point you said is they'll reveal what they want from their business. They'll reveal their their vision for their business, their gap, as you called it, which gives the accountant ammunition for how to sell them, how to upsell. There's the value of their services. Yeah. And the sales conversation, it's really low because it's like, well, if you want to get and I know you're here now, here's how I can help you.

Now if you think about those words, here is how I can help you. Seven words. Almost no sale in it at all. That's right. But but the business owners paying attention to you, they are hyper focused on how can you can help me. And they love that. Yeah. And as the accountant, you might not know the full journey of an exit.

I've been through hundreds, so I know only tweaks and ins and outs and actually I still don't know everything. So every one, every new one still surprises me in some way. But you don't need to know the full, the full gambit of the journey. But what you do need to know is just some of the essentials that will get your client doing the basics that don't build that platform of resilience into their business and the increasing profitability.

So will also be matched with usually a reduced stress and a slightly more relaxed view and more confidence in what the future is going to hold. Then start looking at things that they should be looking at rather than being dragged into their menu tie. They'll start thinking about what can I delegate so that I've got the brain space to think about this stuff, because 90% of business owners never think take the time to think strategically.

Yeah, yeah. If you just half an hour of the day, let's start with half an hour. What do I need to drop in my day? Because there's really only three jobs that you have as a business owner getting and keeping customers, staying legal and finding ways of getting and keeping customers or staying legal more efficiently and more effectively.

That's it. Those are the three jobs, and most of the time you are spending it literally looking at your feet, looking at the next step of the business. And actually the job of the business owner is to raise their eyes onto the horizon. And the job of the accountant is to help the business owner just take that move up.

And if you're doing it yourself, if you say, well, this is what I'm doing in my practice, you're literally role modeling the way. Yeah. And if you can do that in your own practice, that is going to increase the value of your accounting practice, which will allow you to have a asset, have that machine at the end of the, you know, when when they're ready to retire or are ready to move on to something else.

You have something that's valuable that can be sold because people people buy businesses based on the amount of cash flow that they produce, which is that's the job of the machine is to produce cash. So if you're machines producing more cash and another machine, it's more valuable. And what you're saying is that most accountants machines are not really valuable.

Then they're into the when they're ready to retire, all comes down to one's one word leverage. Leverage. Yeah. Someone else who's cheaper than you. Because as a business owner, your 10,000 pounds an hour work. Get someone else who's cheaper than you to do the day to day so that you can elevate yourself into making being a decision maker and a strategist.

Yeah, and they may not do it the same way as you. I mean, goodness me, they might do it better. But you know, the bless their thought they won't. Yeah. They will do exactly the same as you, but they might find ways of doing it more efficiently. Yeah. I mean, my, my first job as a qualified accountant, I had two lines on my job description.

Keep us legal and find ways of adding value to this business. And the legal stuff was really dull stuff like consolidated year end accounts and monthly management accounts and group that returns and like the dull, dull stuff. And forgive me anybody who's listening that actually thinks, well, that's the interesting stuff. So what did I do? Because it was so dull, I made it really efficient because I wanted to get on to the exciting, interesting stuff.

And one piece of advice I'd give any accountant is if this is starting to make you shake a little, then write down everything that you do every day, and then do that for a week, minimum, possibly two weeks, and then start looking at all of those things that you're that you're currently doing now. Does it fit the three jobs getting keeping customers, staying legal, or making, getting and keeping customers more efficient?

Okay, they're all allowed on there. But but equally, they're also those things are also allowed to be delegated. And then if there's nothing on your your things to do, you know, the things that you've done in the last week that is in any way long term planning or strategic planning or actually thinking about the future, then think about how you can carve.

Okay, let's just make it an hour, three times a week to just think. And then once you start thinking, then you'll actually see opportunity. And and then actually this getting and keeping customers getting and keeping customers, which is basically sales and service delivery can be done with a conversation. No, I love that phoning up going, can I sell you stuff nobody wants to hear?

I want to sell you stuff. Right? What they do want to hear is, I really care about you. Why don't we have a conversation about what's going on with you at the moment? And then selling ideally place to do that. Absolutely. And by selling these higher value services, which will allow you to charge more, which means that you will be transforming yourself from from owning a low paying, stressful job to owning a business that has value.

Yes. Yeah. Yeah, absolutely. I have and I think this is a great conversation. And and I think a lot of this, this conversation will appeal to a lot of accountants and bookkeepers who own their firm, who feel like they are the business. They are the job. If they take two weeks off, a weekend off, or even a day off, their business just struggles and they, they, they want help on creating a valuable firm that can be sold one day.

Yeah. And and so for more than just the revenue line, because I know that's the pattern, is that there's a lot of consolidation going on where the, you know, good practices are being sold for between point eight and .25 of the revenue line. But wouldn't it be really nice to be sold for a multiple of your profits?

Yes, absolutely. Which means we need to get profits up. Yes, absolutely. So, Christine, somebody listening says, I agree 100%. Where can I learn more? Oh, brilliant. I love that question because I wrote a book about it. So, you can find my book, sell it. On Amazon. So it's, and it's on Amazon worldwide.

You can find out more about what I do and, and how you can use what I do, to generate more fees by, finding me at Business Mentor uk.com. Or you can find me on LinkedIn just typing. Christine Nicholson. And then you'll see that I come fairly near the top because I get quite a lot of searches.

But if you're looking for the right one, I have to say, I think my picture has me with slightly blonder hair. Look, But I'm the multi-award winning business bent on you. You'll find me with all my brand colors there. Perfect. We'll put those three things in the show. Notes the book. This is called Sell It. And then the your website Christine nicholson.com or dot dot co.uk so my website is Business Mentor UK perfect business although we do and I do work worldwide.

Okay. Excellent. And then we'll put your LinkedIn in the show notes as well so anybody can click on it. Well Christine, thank you so much for being on the show today. No, thank you so much for giving me the chance to eulogize about something I'm really passionate about. Yeah. And to everyone listening or watching, thank you for spending the last few minutes with Christine and I.