This is an excerpt from The Unplugged Vacation. You can download the book for free here.
I feel like big benchmarks naturally drive delegation. A lot of people are very data-driven, decision-makers. Personally, I like data, but I don’t like a lot of data. I like a few benchmarks that I know will cause me to change my behavior. If you have an accounting practice, we suggest you track four benchmarks: Top-line Revenue, Cash-flow to Owner, Number of days off, and Number of Staff. There’s a huge benefit to checking and updating these benchmarks periodically. Maybe it’s monthly. Maybe it’s quarterly. But the perspective is immensely beneficial because it will naturally start to influence your day-to-day decisions. If you’re tracking these benchmarks or Key Performance Indicators (KPIs) and you have goals associated with each one, you can recognize what you need to do to progress toward those goals. If you have a goal of a certain number of days off for the year, you can’t hit that goal without delegating. It’s almost impossible to hit that goal without becoming better at delegation.
Creating Your Own Benchmarks
I think a benchmark needs to be something that you can emotionally connect with. Let’s say you set a goal for six weeks off a year. Does that get you excited? Does it get you excited enough to actually commit to doing it?
For me, an emotional connection to a goal or benchmark would be, “I want to spend time with my daughter, who’s getting ready to graduate.” This is more powerful than, “I want to make $2 million or $100 million.” You need to really break it down that granularly.
You need to get to the why. Why do I want to take six weeks off? I want to connect with my family. Why do you want to connect with your family? They’re the most important people in the world to me. I want to be able to look out for my health better, so I want to be able to have an exercise routine on a consistent basis. You can’t just set a goal because you think that’s the right goal to set. You must set a goal that’s meaningful to you
When I’m setting benchmarks, I’m not only talking about financial benchmarks but physical benchmarks, home benchmarks, even intellectual benchmarks. Maybe you want to go get another certification. The key point here is to look for whatever is going to motivate you.
What do you really want? Why do you want it? I know, that’s vague and lofty, but I think for all of us, there are usually just a few things that jump out. If you have 20 benchmarks, you’re probably not going to hit any of those goals. Maybe you will hit a few of them, but you’re not going to be really focused on any of them very well. If you only have three key benchmarks, they all need to have significance in terms of motivating you to actually implement and take action.
This is an excerpt from The Unplugged Vacation. You can download the book for free here.
PS – Whenever you’re ready, here are 4 other ways we can help:
- Seller FAQ: Answers to the questions sellers are asking. From practice value, to timing, we’ve got you covered.
- Strategic Guide to Selling your CPA Practice Video: The how-to of selling a CPA firm.
- Accounting Practice Academy: If you’re looking for benchmarks, our 8-week workshop has a community of established firm owners that will help you get perspective, reduce your owner hours, and raise your bottom line. email ibrennan@poegroupadvisors.com with “APA” and we will fill you in on the details.
- If you want to chat about your exit strategy, email bball@poegroupadvisors.com with “strategy call” or request a call here.
