This is part two of an article about what I have learned from 10 years of building SCG Chartered Accountants in Ghana. Read part one here.
In this article, I discuss a few more lessons I’ve learned over the years.
1. Learn to say ‘no’ and focus
A startup is often cash strapped and struggling to build clients. It’s tempted to pursue any opportunity that might yield quick cash. Many people chase every opportunity that presents itself.
Accounting entrepreneurs often fall for this trap. Many take any job or opportunity that comes their way. They risk doing poor work because you can’t be good at everything. And when you do poor work, word soon spreads.
A Russian proverb says, “If you chase two rabbits, you will not catch either one.” Similarly, you can’t be good at all the many services you provide. This comes back to hurt your prospects.
Lesson: Stay focused and say no to some opportunities.
2. Feed the goose that lays the golden egg
Most times, the initial capital is all they put in. They are unwilling to reinvest in the business. They put personal needs and lifestyle over the businesses and don’t reinvest in the business.
You can’t grow a business without investing in all areas of the business. Competition is always fierce, and you can’t compete with poorly trained staff and out-of-date tools.
Lesson: Balance personal and business needs and reinvest enough to keep the business competitive.
3. Information technology (IT) is an enabler, embrace it
Many entrepreneurs don’t know IT can help them run efficient businesses. They also don’t know they can get IT at a reasonable cost to run every part of a business.
As an example of the power of technology, compare an online shop to a physical shop. A physical shop restricts opportunities to the location of the shop. An online shop has access to the global market and is open 24/7. That’s the opportunity tech can bring.
Accounting is now a tech-driven business. To remain competitive, small firms like mine must invest in technology. The task is to find and implement a suitable product.
One solution is to find help to understand what’s available and can help your business. You must then choose and implement a suitable technology tool. You must periodically update your IT tools.
Lesson: Using IT can make a business efficient. Don’t ignore it! Get help to carry out an IT strategy.
4. What got you here won’t take you there!
Everybody wants to grow their business, but growth always brings new challenges – processes, people, technology and more. I didn’t know this at the time, but as our firm grew, we faced new challenges and made less money. It was stressful!
We felt stressed because we grew the business without making the changes needed to support a bigger business. To run a firm of 32 people, we needed to invest in administrative support, to define various policies and processes, and build stronger information systems to manage the firm. This is still a work in progress.
Lesson: If you want to grow a business, you must plan for growth otherwise you’ll struggle. You don’t only need capital – you need stronger processes, stronger information and HR systems and maybe even different skills.
5. Accounting is a business, not a firm or a practice
I came to this realization with time. It has implications for the skills and investments you need to run an accounting firm. This is important if, like us, you aspire to leave your successors with a healthy business.
Accounting firms give attention to the technical aspects of the business but not to other important functions.
As competition intensifies, this approach can only take you so far. You may not grow at the rate you want. As Tony Robbins says, “if you are not growing, you are dying.” In the same way, if your business is not growing, it is dying.
Lesson: Accounting is a business and you must run it as one. You must invest in marketing, HR, financial systems, operations, and strategy and technical capacity. You cannot do all this at the start, but you must plan and, over time, build the systems.
6. Effective succession does not happen by chance!
Most entrepreneurs want their business to live beyond them. They also want to take their equity from the business. Sadly, most businesses die with the entrepreneur and they don’t realize the equity in the business. Many local accounting firms die with the founders.
If you want succession, then you must work towards it long before you retire. First, you must organize the business – install processes, technology, the right staff and all the functions you need for the business to work well.
Once that is done, begin a transition by taking yourself out of daily routines, delegating responsibility and concentrating on strategy, market/brand development, and management.
One of our goals is for younger partners to take over from us. We’ve just appointed the first junior partner and designated successors in some units. We are mentoring them and delegating responsibility to them. I, for example, am not involved in delivering technical work. I spend most of the time trying to organize and improve the firm.
Lesson: Most entrepreneurs want the business to live beyond them. They also want to take out the equity built in the business. If that is your goal, you must organize the business. Then to begin the transition, take yourself out of daily routines and focus on strategy and management.
Over the past 10 years, I have learned that an accounting firm is a real business. If you want to leave the firm to successors, you must work on building all the elements that makes any business work. Since I didn’t know much about most of these elements, this has been a journey of trial and error, and of discovery and tenacious execution.
The journey is still on. And the exciting thing about the journey is what you become as a result.
Written by: George Katako
George is the Managing Partner of SCG Chartered Accountants.