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Succession Planning

Don’t forget your own succession plan

Accountants are becoming very familiar with succession planning, and many have established themselves as specialists in this fast-growing area. But it’s important that they aren’t so busy doing succession plans for their clients that they forget to prepare one for their own firm.

Statistics indicate that one in three partners of firms with less than $5 million in annual revenue will turn management of their business over to new hands within the next five years.

For many accountants the value of their practice is their most valuable asset. It’s also the most likely source of the funds that will support their retirement. However, more than three-quarters of accountants replying to a 2004 PCPS poll said they didn’t have a written succession plan in place. Providing for retirement benefits would still pose a challenge for 46% of the firms.

Another survey conducted by the Member Service Group of the Canadian Institute of Chartered Accountants (CICA) found that nearly half of practitioners said they will retire from their businesses within the next ten years — and yet 62% of the respondents either do not have a succession plan or are not sure if they have one. Of those who do have a succession plan, only 22% have one in written form.

“If you’re a sole practitioner, don’t wait to get a plan in place,” says Donald Scholl, a West Chester, Pennsylvania, management consultant to the profession. “While it is rare, some CPAs have needed a plan to manage a practice transition while they were relatively young.”

Who will replace you as the head of the firm?

This is an important question because this person must be able to keep the business running well so that your payouts can be made on schedule. Ideally this person will be someone from within the firm whom you can mentor and nurture in preparation for their replacing you.

Not every accountant has the entrepreneurial drive or management ability to run a practice. The role also requires leadership skills and the ability to deal with clients – a much bigger list of requirements than simply being a competent accounting practitioner.

Writing in the Ohio CPA Journal, Bob Bates, a partner with Crowe Chizek in Indianapolis, Indiana had this to say about leadership transition: “Leadership transition may receive the least attention of the three components of succession, but I view it to be the most critical component.

“Without leadership for the organization into the future, all the best estate and ownership transition plans may be of little use.”

In November, 1993 Seattle-based accounting firm Moss Adams LLP named Rick Anderson to succeed Robert Bunting as CEO in June 2004, but the process of planning the succession had begun many years before.

Anderson joined Moss Adams in 1973 and rose through the ranks to become the firm’s president and chief operating officer. When he took over as CEO of the tenth largest accounting firm in the U.S. he had already had twenty years of experience with the firm and had been carefully groomed for the top job.

There’s a rule of thumb that says it takes at least five years to prepare a successor to take over the role of heading up a firm. The right person has to first be found, then groomed for the job, and the sooner the hunt begins, the better it will be for your own personal welfare.

Start planning years ahead

Succession isn’t something that can be planned quickly Regardless of the size of your practice, planning should be commenced years ahead of the intended date to be sure you receive the highest possible benefits when you leave the firm.

Quoted in the Journal of Accountancy (March 2002), Jody Davis, CPA who is an authority on small-business succession planning issues, says: “Most small-business owners don’t have an exit strategy. They just don’t want to deal with it until it’s too late–and that’s just as true for small CPA firms.

“Principals should start succession planning sooner rather than later – that is, a minimum of 10 years before a senior partner’s proposed retirement to allow enough time to look at all the transition and funding possibilities.”

 

Article courtesy of RAN ONE: http://www.ranone.com/features/news.asp?ID=4218

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Being A Team Player

Poor relationships within the team will always reflect on morale and have been proven to impact on the bottom line. You can make or break a career or a job depending on the way you behave with fellow workers. Workplaces need to be profitable for businesses and for the people in them – and that means personally and financially.

Whether you are a leader or a team member there are actions you can take to create a positive, empowering, motivational work environment for people.

A CEO complained that his managers only brought him problems. When you come to the meeting with a problem, have some suggested solutions ready at the same time. The negative effect simply complaining disappears, and is replaced with an atmosphere of constructively sharing in resolving issues.

Constantly laying the blame on someone or something else is negative and often destructive of team spirit. Don’t put your effort into finding ways to point the finger at others. People are more likely to recognize their contribution to the problem if they are not publicly humiliated in the process. You will alienate others and end up with enemies, not conducive to your future job prospects or your business’ success.

It’s not just what you say; it’s also how you say it, and the message that your body language conveys. Apparently polite words won’t cover up for disrespectful or rude actions; sarcasm, shouting and other aggressive behaviors are never acceptable communication methods.

The middle of an important meeting with clients or senior managers is never the right time to reveal problems that your co-worker, boss, or reporting staff person is not aware of. Sometimes called ambushing, no-one wants to be humiliated by learning of problems for the first time in a public forum. They won’t respect or trust you in the future.

Be reliable. Keep your commitments. Like the walls of the honeycomb, we are interconnected in a business. If you miss your deadlines, it will impact on the work of others. If you can’t meet a deadline, let others know quickly so that alternative arrangements can be prepared.

Be generous and share credit for accomplishments, ideas, and contributions. When you think about it, virtually everything we achieve comes about as a result of input of some kind from others. Thank people, and acknowledge their contributions. Employees and co-workers will be more motivated to share ideas with you and contribute to your projects (and to your success).

Everyone has something to offer if we encourage them to share it. The growth of one person benefits the whole group. So compliment, praise, notice the efforts people make.

 

Article courtesy of RAN ONE: http://www.ranone.com/features/news.asp?ID=4373

customer-service

Audit Your Standards of Customer Service

So much is said in retailing about customer service but not enough is actually done about it. The goal of every retailer should be to deliver truly outstanding customer service but management in most stores – even the major chains, have no idea about the level of service they’re providing to their customers.

Customers will only come back to a retail outlet if they get good service. To put it another way, poor service is a guarantee you’ll lose customers. Since it takes about five times as much effort to get a new customer as it does to retain one it’s well worth the investment it takes to raise your standards of customer service to the highest possible level.

Giving outstanding customer service has real economic benefits for retailers. It means you don’t have to discount heavily to attract new customers, nor will you have to spend a fortune on advertising.

You need to look closely at the level of customer service your retail establishment delivers. Don’t look at it from your point of view but put yourself in the place of customers who don’t know the location of every product in the store, who don’t know all the details – colors, sizes, etc. of products you sell, and who don’t know the sales team on a first name basis.

Remember too that customer service is about your whole store. It’s about the people, the premises and the total impression that customers receive.

Your people

Start by taking a good look at your team members. Do they all have a real customer service focus? If a customer is ignored or treated with indifference, perhaps even rudeness, chances are you’ll never hear about it. They’ll just go away and never come back.

Finding the right people for your sales team is the best way to deliver outstanding customer service. It’s up to you to select those with good people skills, and some just don’t have them.

No matter how smart or polished a person is, if they can’t instantly relate to your customers they should not be the interface between your store and the public.

There is a golden rule about customer service that never changes: The customer comes first. Remember that and make sure everybody on your sales team knows it. That really does mean ‘first’ – not after stocking a shelf or when the phone call’s finished, but absolutely number one first.

Are customers recognized and offered assistance immediately? Do they have to come to a counter to get attention or do members of the sales team go out to them? Watch carefully and see what really happens. If customers aren’t being treated like the valuable guests they are your sales will suffer.

Anyone on your sales team that won’t accept this principle doesn’t belong there. To some degree a less than perfect attitude can be corrected by training but it’s far better to be selective at the time you’re choosing sales team members than to try to correct a staffing mistake later.

It’s worth paying a market research firm to conduct ‘secret shopper’ surveys and get an objective opinion on each key member of the sales team. The returns on this investment come back immediately.

Your premises

Next, look at the physical attributes of your premises. It’s an important part of the customer experience and is another contributor to customer service.

Ask some people who are representative of your typical customers to take you through the store and make comments on everything they see that needs attention. Get their honest opinions of:

▪ Store lighting
▪ Displays
▪ Merchandise selection
▪ Store layout
▪ Colors of walls, carpet, etc.
▪ Appearance of sales personnel
▪ Temperature of the premises
▪ Location
▪ Parking, toilet facilities

You may find that your store’s appearance has become tired or dated. You may find the facilities aren’t up to the standards of those offered by your competitors. It’s certain you’ll find something needs fixing that you weren’t aware of because your customers notice a lot more than you do.

Your external contacts

How does your store perform from the outside? That means checking out your telephone service and your website, if you have one. Your opportunity to deliver outstanding customer service begins at the first point of contact between your store and a customer and that’s often an electronic one.

Do you know how your team handles a customer’s telephone call? They know your voice, naturally, but if you ask someone to call in with a simple inquiry about a product you stock you’ll know how a typical customer is handled.
Ask three or four people to call your store and tell you about their experiences. You may find some telephone training is needed.

The same goes for that website you spent so much money on. Is it really customer-friendly? Does it look as good as the competition’s? Does it work like it’s supposed to? Don’t try and judge for yourself but get others to take a look at it and get their opinions.

When you’ve seen how your people, your premises and your external contacts work to deliver customer service, ask yourself the big question: “Is my customer service outstanding?”

Retailers that don’t answer ‘yes’ to this question need to act immediately to fix whatever it is that’s holding them back. If you can’t answer ‘yes’ but your competitors can, where are your customers likely to go for their next shopping experience?

 

Article courtesy of RAN ONE: http://www.ranone.com/features/news.asp?ID=3925

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Understanding Your Competitive Edge

Analyze the competition and get ahead

Author and futurist Charles M. Perrottet identified two types of businesses – eagles and ostriches. The eagles analyze their competitors and assume their competitors do the same to them. The ostriches don’t look around them and remain focused on their own activities without regard for anyone else.

Most businesses don’t know enough about their rivals to anticipate the moves their competitors are going to make. In short, most of them are ostriches. Very few businesses will optimize their profitability without a basic awareness of their competitors’ activities and operations but far too many try.

Competitor Analysis (or ‘CA’) is an in-depth analysis of one or more rivals. This involves gathering information on how they’re structured, how they operate, who their people are, their strengths and weaknesses, and what they’re likely to do in the future.

It’s this kind of information that can be used to make decisions about your own business – emulate the best aspects, avoid duplicating the mistakes of others, and plan your own future so that you’ll come out on top.

To be really good at CA means that you’ll know almost as much about your competitors as you do about your own business. This is expensive and time-consuming as you’d expect so most businesses compromise and do a job that’s less than perfect but hopefully is still adequate.

How far you go towards full CA will be determined by many factors. You might do just the minimum and collect your rivals’ literature, visit their websites, sample their products, monitor news articles about them, and possibly talk with some of their customers and staff. This will at least give you an idea of what they’re up to.

The four basic steps of CA essentially involve identifying rivals, performing a SWOT analysis on them, then feeding this knowledge back into your own business:

1. Identify and learn about your competitors
2. Analyze their strengths and weaknesses
3. Identify their opportunities and threats
4. Relate this knowledge to your business

Identify and learn about your competitors

If you think you don’t have any competitors you have good reason to worry. If nobody else thinks your line of business is a good idea you might not be in it for long. Chances are that you do have competitors and you need to know what they’re doing.

Think outside the square. For example, a professional services firm offering immigration advice has lots of direct rivals. Some are up the street, some are on the internet, some work for government bodies (your competitors don’t always charge for their services), and some are in other countries.

Look first at those who dominate your market – the big brands, the big names. Then go down the chain to the others supplying your market. Always ask: “Who else can give my customers what I sell to them?” and then you’ll start identifying all your competitors.

Be aware too of those who are potential competitors. Growing market segments are an invitation for established firms to expand into them and it’s unwise to assume you’ll have anything to yourself for long. Who has the ability to become a competitor? Add them to your list of rivals.

Analyze their strengths and weaknesses

Here’s where it starts getting hard. Each of those rivals or potential rivals has strengths you need to analyze to see if they can be developed in your business. Why do their customers buy from them? What makes them successful? It could be their products or it could be their marketing. What is it?

Then it comes down to finding out what their weaknesses are. Are their prices too high? Are their locations poor? Perhaps their products are inferior to others in your market. If you know their weaknesses the chances are they do too, which can be a guide to their future actions.

Identify their opportunities and threats

These are outside factors and will mostly be your own opportunities and threats as well. An example is the advent of the internet on traditional retailers. For some it was a threat but for most it became an opportunity.

For a while the hype screamed that ‘bricks and mortar’ stores were going to be superseded by a new breed of web-based retailers but as we now know it didn’t turn out that way. Using CA the traditional retailers quickly expanded into having their own websites and online catalogues, effectively shutting out most of the newcomers and riding out the storm until it blew over.

Look for any outside factors that could affect your business. These factors could be driven by technology, the result of new legislation or even the development of a new product.

Some will be opportunities for you to grow your business and others will be threats that could mean you have to adapt or lose some of your market. As long as you’ve identified them you possess the knowledge you need to make decisions about your future.

Relate this knowledge to your business

You’ve identified your competitors and know their strengths and weaknesses. You’ve also determined the opportunities and threats out there in the marketplace. Now it’s time to work out what you need to do to drive your business where you want it to go.

Start by doing a SWOT analysis on your own business. Look at such elements as your pricing, your operating costs, your marketing and your ability to change to meet the competition. How do you stack up?

What your competitors are doing right you can do as well. If you’re also doing what they’re doing that’s wrong, stop doing it. Fine-tune your business so that you can take advantage of the opportunities out there and not be injured by outside factors that threaten your success.

Be an eagle and you’ll never have to worry about the ostriches!

 

Article courtesy of RAN ONE: http://www.ranone.com/features/news.asp?ID=3930

work-environment

Build A Strong Workplace Culture

Accentuate the positive

Every firm has its ups and downs, and that can have a major effect on morale. If times get tough or the firm has to drastically cut expenditures there’s often a negative emotion that grows until it pervades the enterprise. We’ve all seen places like that – the team members are moody, there’s a lot of internal complaining and bickering, and the firm’s performance suffers as a result.

Management has to take the lead and get everybody back on a positive mental track. The old song ‘Accentuate the Positive’ was never more relevant than in the contemporary world when changes to long-established businesses happen overnight and cause disruptions that can have long-term effects on the whole organization.

Set a positive example

Management – that’s you, has to set a good example by making a big effort to send out the right signals. Be positive and upbeat, even if you might be feeling a bit negative yourself. If you work at it and you’ll even start feeling better. Remember to praise good work, especially if some of the team is allowing their standards slip, and counsel those who are letting the side down.

Always look on the bright side

People with a negative mindset often can’t see anything positive around them. They look for the bad news and overlook the good news. Instead, focus yourself on finding the good news.

Don’t build on negatives

Firms experiencing trouble often adopt a negative view instead of finding solutions. In other words, they become overly defensive and don’t look for actions that will get them out of their holes. The more that negatives are discussed and focused on, the worse things will get. Instead, think positively and aggressively.

Admit to the real problems

The point you want to make with your behavior is that you know there are some problems but you’re working to overcome them. Accept that some of your people are feeling negatively and talk to them about it. This gives you the chance to correct any misunderstandings and enlist their help to resolve the real problems.

Reinforce your team’s successes

Any positive results – a big assignment from an existing client or gaining a new client, should be recognized immediately. Share the good news around and compliment everyone that made a contribution to the achievement. Take the attitude that any win is a good win and deserves to be celebrated.

Bond your team together

Stress often causes people to hide and to isolate themselves. The team structure is threatened because its members no longer work collaboratively. It’s up to you to re-establish their bonds and bring in a spirit of ‘let’s all work together’. You have to be the leader of the team and extend yourself to make sure everyone pulls their weight.

Share the problem-solving

Be upfront and share the problems with your team, but keep the focus on getting over the difficulties rather than on what their effects might be. Ask for the team’s help and suggestions; you may be surprised by the solutions they present. This also gives them a feeling that you’re all working together to return to a positive mode.

It’s up to you

Nothing goes smoothly forever. Most enterprises have cycles and there are going to be times when events coincide in such a way that a feeling of negativity goes right through a firm.

That’s when management has to act by working to overcome negativity and refocus the organization on positive issues. It’s not going to happen unless you make it happen!

 

Article courtesy of RAN ONE: http://www.ranone.com/features/news.asp?ID=4048