Do your clients "drive their business" exactly as they would drive their car?
How often does anybody get behind the wheel of a car and start driving aimlessly - with no clue where they are going - or even wondering if all the passengers are on board and ready for the journey? The right answer is very rarely - hopefully!
So, why is that most of your business owner clients "get behind their business desk" and seem to be content with just "driving aimlessly" with little idea of where they are going (or whether their team understands why they are going)?
Actually, that is not strictly true - business owners usually have a reasonable grasp of their "short-term direction". They focus on obviously important things like revenue, margins, overheads, profits, and maybe market share. In fact most business owners are quite good at looking (say) a few weeks or months ahead. But they rarely look much further into the distance than that.
We should stress, that it is obviously 100% essential for your business owner clients to concentrate on short-term priorities - but it's just not a good idea for them to ONLY do that 100% of their time!
Clearly, if your business clients ONLY EVER concentrate on the short-term they will ONLY EVER concentrate on the short-term – and that’s not going to help them grow long-term business value.
Depending on what stage of development business owners are at in their "business lifecycle" they really should be spending at least 5-10% of their time thinking longer-term (ideally about 3-5 years ahead) and concentrating on one (or both) of two key "big business outcomes" - either:
* HOW to grow their business profits (over the next 3-5 years) or
* HOW to grow their business value (over that period)
So why don't most business owners think longer-term?
Most business owners don’t plan ahead because they are not encouraged to do so by their professional advisors (who have a fiduciary duty to be helping their clients to maximize business potential).
Moreover, most business owners have had no "proper training" in how to build a "longer-term" strategic plan. Again their advisors should be helping them.
Most business owners have learned the hard way (often from start-up stage) that it is important to concentrate on juggling the essentials in their business to survive. They have learned to "spin plates".
However, once the client has moved beyond initial "survival" mode – they should properly consider how best for them to "grow and prosper"? The first thing the owner needs to learn is how to stop "spinning plates"!
Most business owners don't need much help with whatever it is they actually "do" (they are already experts at building, or selling, or servicing their particular "widget").
Where most business owners need help and advice is to be able to "build a proper business". Usually the client will be doing this for their first (and only) time. Without help most of your business owner clients are highly unlikely to maximize their business potential (or even come remotely close to doing so).
As a forward –looking, proactive, 21st Century CPA you are in a great position to easily help your clients – by using a systematic approach.
Introduce your clients to the “3 Ingredients of Business Success”
There are 3 ingredients of success if any business owner wants to maximize their potential. The formula for success is Vision x Plan x Desire.
Every business owner needs to know "where they are going" on their business journey otherwise (by definition) it is impossible for them to “get there”!
Business owners then need to be able to identify the (top priority) "key strategic thrusts" required to make their Vision actually happen (and start moving the business from “Point A” to “Point B”.
Business owners need to get their team on board - and "bought in" – and accountable to help them achieve their Vision. That’s how business owners can begin to stop “spinning plates”
Gone are the days when owners can simply “tell their people” what to do and expect them to "blindly follow orders"! The team needs to know where they are going (Vision) and why it matters (Purpose). You wouldn't dream of telling your kids to just “shut up and get in the car - you'll find out where we are going when we get there” (unless it’s a really nice surprise - that is a recipe for a really bad journey!).
So why do business owners think it’s a good idea to keep their team in the dark regarding the business vision and where they are going?
Think of the Business Plan as being like the GPS in your car.
Once the owner knows where they are going they can concentrate on the best route to get there, but without a destination (Vision) your GPS is obviously useless.
The business owner needs to take the top priority “key strategic thrusts" (above) and prepare detailed action plans to begin to make the vision actually become reality.
The business owner needs to stop "spinning plates" and get their management or team to help prepare those plans - so that they "own them" and are accountable to deliver them (and rewarded properly for doing so).
The business owner needs the right Key Performance Indicators so that it is apparent if the plans are working (or not). Think of these like having an "estimated time of arrival" on your GPS.
Think of "Desire" as being the "essential fuel" to get from "A" to "B" on the journey.
Just because the business owner knows the destination (Vision) and the best route (Plan) they will not arrive at their destination without "filling up with gas" (Desire).
Your business owner clients need to demonstrate the desire to keep driving towards their destination.
As a 21st Century CPA you are potentially fantastically well positioned to really help your clients to maintain desire. Desire is actually the most important ingredient of business success - and the “secret sauce” of advisor success in becoming part of the client team. At Elite Resource Team Solutions we help CPAs to really focus on this step and help them become their client’s “Most Relevant Advisor”.
Sounds simple – but as we said, desire is the most important of the 3 ingredients of success - and most businesses leaders are still using 20th Century methods - and then wonder why their team are not "on board" for the journey.
If you are a 21st Century CPA you have a fiduciary duty to help your business owner clients to maximize business potential. You should be encouraging your best clients to “drive their business like they drive their car” – and we can show you HOW.