Where Are You Headed?

The following is a weekly email series describing a real-life Practice Management Success story about an ASTPS member who had a vision of where he wanted to be in life and in his practice.  If you have a vision of where you want be in both aspects but haven't reached your pinnacle yet, this is a series you'll definitely want to keep up with. 

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PART 1

Where would you like to be?

Where are you headed?

Is the answer to both questions the same?

Hopefully, it is.

Many practitioners are just working away with a vague notion that with enough hard work and dedication their business will grow, they will prosper, and things will come out okay. Truth is, with enough effort and dedication things probably will turn out okay. Question is, do you want to settle for okay? What’s wrong with great, or terrific, or fantastic, or even stupendous? That’s how I want things to turn out.

Here’s an idea to try. For the next three days, break your routine, stop what you normally do, and spend an hour each day daydreaming, staring out the window, or fantasizing about how you would really like to be living. I’ll bet the vision you come up with is different than where you are headed with your hard work and dedication routine. If not, then keep at it and now you are sure you are on the right track. If, as I suspect, your vision and your routine are not in sync, it’s time to make some changes.

About a year ago, Robert, a new ASTPS member took my advice. He went to one of his favorite places to think about his plan: the local bookstore. He felt that he was earning a good living, but that maintaining it was a constant struggle. Every bump in the road meant putting in a few more hours to meet the need. After reflecting on his “plan” for a couple of mornings, Robert realized he had no plan. Every problem was answered with Robert needed work more. He realized that he was just marking time. On top of that, the good living wasn’t nearly as good as what he wanted and honestly believed he was worth.

If any of this sounds familiar, you may find some inspiration in Robert’s process to shape his personal definition of success and his plan to make it a reality. Let’s look at Robert’s wish list and his action plan – in the next email.

PART 2

 In  the  last email ,  we   ended  with  our friend  Robert's commitment to define his  personal  vision of success and create a plan to make it reality.
Let's  take a look at  Robert' s list of  druther s that came from staring out the w indow of his favorite bookstore: 

 I want my practice to provide  a comfortable living for me and my family .
My family  and I  can live comfortably  and enjoy life  on $150,000 per year .I want to work no more than 50 hours per week, except i n the summer ,  I want to work only 40 hours for July and August.
I want to play golf  once or twice a week  in the summer,  I want  to get  my handicap  down from 22 to 15 .
I want to vacation  2 weeks in the summer and 1  week  late in April each year.
I want to exercise more and lose  15 pounds.
Any of this  sound  familiar? Take a little time to daydream and come up with your own list between now and the next email.

In PART 3  we will  compare  Robert's list to reality - that should be revealing!

PART 3

In the first email, we examined Robert's commitment to define his personal vision of success and create a plan to make it reality. After that, we looked at what he came up with as his personal definition of success. Today, we will look at his assessment of where he was as he began answering the question, "Where are you headed?"

First, Robert had to compare his present position to his wish list. The hardest part was being entirely honest with himself. Here's what he came up with:

Last year my income was $80,000 plus some perks (health insurance and car use) that were worth about $15,000 more. All-in-all way short of what I would like.
In the last twelve months, I have worked between 60 and 70 hours a week.  The only exceptions were holiday weeks when my family virtually demanded my presence.
I played golf three times in the last year.  I'd love to believe my handicap was still 22!
In the last three years, my only "vacation" was a couple of long weekends.  These "vacations" were spent visiting my wife's family.
If I were to exercise one hour three times a week, it would be three hours more than I have done in the last few years.  I have blown several resolutions to "get back to it." I keep telling myself I have work to get done and I'll start next week.
Robert and I discussed his introspective list, we concluded that it was currently nothing more than a regrets list. If he wanted to make the regrets list into reality, he had to make a plan take action. We'll start that process in the next email.

PART 4

In the last three emails we followed our friend Robert as he moved along the path to awareness of his then-present status to his contemplation of his" druthers." Today, we will begin looking at the plan he and I formulated to transform his  regrets list   into a goals list. 

The first topic Robert and I discussed was his practice income. He believed that it would be nearly impossible earn enough to close the gap between the current and desired earnings. After all, he was already working way more than he wanted. I could see that this one is going to be a tough one to answer.

I asked him if he was willing to try a different approach to his practice and even tolerate some additional risk along the way to making the changes. He agreed to do his best, but worried that old habits and old ways of doing things might be hard to give up. He also worried that he might actually do worse instead of better. Slipping backward would make the regrets list grow longer.  Like the good soldier, he bravely committed to making and implementing a plan to achieve his goals.

We started with his client list and the annual billing to each client. I asked him to select the ten percent of the clients that he enjoyed working with the least. You will be amazed at the results of this exercise. We will describe it in the next installment.

PART 5

This is part five of a series on practice growth and management. Recall that we have been following the progress of Robert who requested support to improve his practice. He committed to devote the resources, implement a plan, and assume the risk involved in change. 

Robert assembled a list of ten clients - of his nearly 100 - that he least enjoyed working with. We then discussed each one with the following breakdown:

Four were difficult, unappreciative, demanding, fee phobic, and regularly under billed because Robert attempted to avoid conflict with them.

Two were clients who Robert felt were marginal in their business ethics. He found himself devoting extra time non-billable time to assure his work could not be faulted.

The six clients were immediately advised that Robert was specializing in tax problem resolution services and would no longer have time to do their work. In other words, he fired them: albeit tactfully. Despite the loss of revenue, Robert was truly relieved once they were gone. He had never realized how much stress they caused him. It was difficult to keep Robert from trying to fill the hours saved with other client work.

The other two clients? Robert really enjoyed working with them, but they were on the list because they required a lot of time, but as old friends their fees started too low several years ago. Now, Robert knew their fees would have to more than double to make them profitable clients. He assumed they would never accept an increase of that magnitude. Surprise! When he explained that he was withdrawing his services and honestly explained why; they thanked him for all his past efforts, and then asked what their new fees would be! They both stayed with him.

Considerably less work and overall only slightly less income not a bad result so far. Robert continued the review over the rest of the client list on his own. He was getting into it! Increased fees and disengaged clients allowed Robert to start to work less hours and nearly maintain his income.

As good as it looks, we had a long way to go. Robert's profits still projected at $80k with the same perks. Profits still needed to increase by $55k.

PART 6

This is part six of a series on practice growth and management. We are still following the progress of Robert who requested support to improve his practice. He committed to devote the resources, implement a plan, and assume the risk involved in change.

Last email we left Robert with a much-improved practice. He was able to reduce working hours and maintain his income. The next task was growing profits by $55,000 per year. This is where tax problem resolution services (TAPeR) became important. Robert had already started offering tax problem resolution services over a year earlier. He considered it an added revenue source to everything he was already doing. My goal was to change his perspective and convince him to grow this into his specialty. To achieve his objective, he needed an additional stream of income and it had to be highly profitable. We agreed that Robert would strive to become recognized for tax problem resolution in his market area.

My experience is that tax problem cases average $4,500 in fee revenue. Robert is new to tax problem resolution, therefore we agreed to use $3,000 per case in our planning. Robert didn't know exactly why, but I convinced him that he would only realize about $2,000 in profit from the $3,000. I had some other things in mind that we will get to soon. I did not want to spring too much on him at once. He did not see any meaningful change in his costs by doing tax problem resolution work.

He was about to learn where the money would be going and that initially it was coming out of his present income. This next step was tough for Robert, but he had agreed to commit the resources and, as instructed, contacted the daily newspaper and one community newspaper.

Robert ordered insertions in the sports section of the daily paper every other Sunday and Monday. Experience has shown these are two of the best-read days for sports. The primary audience of the sports section includes our high profile prospects: males, aged 30-70, with income. Making the insertions every other week keeps the cost down. He ordered insertions in the community paper weekly with the only placement requirement being upper left corner. He was able to negotiate the placement because he allowed the paper to place his ad on any page and he committed to a six-month run. The ads were one column wide and two inches long bearing the "Tax Problems?" headline.

This was Robert's first lesson in where the money from his new profits would be going. He still didn't see where a thousand dollars of each case would be invested in the marketing, but he went along with the assumptions.

Some simple math told us that he would hit the $55,000 profit target by gaining about 28 cases per year. Seeing as holiday months like December and vacation months like July do not usually see as many new cases as top-of-mind months like February, March, and April we decided to count only 40 weeks per year. Robert's yardstick was thereby set as 1 new case every ten days on average.

In the next installment, I will discuss the management tools that apply to this stage of the plan to reach Robert's goals, the results of his efforts, and where he might incur the rest of his costs.