The 5 Mindset Traps- CPA Firm Practice Management

 

Steering Clear of the Five Mindset Traps

This is an excerpt from The Unplugged Vacation. You can download the book for free here.

Most of these mindset traps will be self explanatory: the “time is money” mindset trap, the technology addiction trap, the client expectation trap, the “I can’t delegate” trap, and the multitasking trap.

Time is Money Trap

When I came into the profession, we had to track our time in six-minute increments. All billing was done based on time. A lot of people still do that. “Time is money” is that mindset of billable hours and equating a certain amount of time with a certain amount of money. The truth is the value that your clients experience from your services has varying levels. An hour of consulting is not the same as an hour of payroll creation or payroll completion, or payroll processing. All time is not created equal, so time does not equal money.

Technology Addiction Trap

You have the technology addiction trap. I think that is especially appropriate for what we’re talking about in this book about taking a vacation without checking email. You get addicted to technology. The smartphone is probably one of the most addictive devices ever created by man. You can let go, though! It just takes a bit of practice.

Client Expectation Trap

The nice thing about setting boundaries around time is you learn how to set boundaries in general. Clients need boundaries, so your job as an owner is to manage client expectations. If you’re not managing client expectations, then you’re basically letting them dictate how you work.

I Can’t Delegate Trap

Then we have the “I can’t delegate” trap. Essentially, that’s the fear of mistakes or a control mindset, and letting go of that is probably one of the toughest things for a lot of owners to come to grips with. Learning how to delegate well is the key.

Multitasking Trap

People underestimate just how powerful it is to focus. Focused attention is so much better than distracted attention. When you’re not managing your time well, or not respecting clear boundaries, or not being intentional about the type of work that you’re taking on as a practice, you water down your focus. It costs you. 

It’s tempting to take on multiple lines of work. A client will come to you and say, “Hey, you’re doing my tax return. I have a friend that needs an expert witness for a divorce case. Would you be willing to do that?” Next thing you know, you’re off figuring out how to be an expert witness. You do that a few times, and you have a few too many service offerings. Pretty soon, you’re not doing any of those well.

A Story Example About Focus

We had a client a few years ago who started a small financial services practice alongside his CPA firm. That’s pretty common.

Eventually, the financial services business got fairly large. He decided he really wanted to give up the accounting practice and just focus on financial services. The problem was – he wanted to keep a few tax clients. We had this discussion with him about the power of focus. When you have two professions to keep up with (accounting and financial services), it’s very difficult to keep up with both and switch gears between specialties. By dividing his focus so much, he could see that both areas were suffering. In the end, he took the advice to not keep any accounting clients, so he didn’t have to stay up to date with tax law changes. 

After letting go of the accounting practice entirely, he was able to step fully into his financial services work. Because he let go of all the tax work, he also realized he could approach CPAs in his market, which meant a huge network of past colleagues/competitors were now profitable referral sources. None of them were threatened that he would take any of their accounting or tax work anymore, so they actually bolstered his business immensely. His financial services business grew rapidly, and he’s quite happy with the decision to let go and focus on one realm of expertise. 

We have a couple of examples where our clients have sold off a section of their practices. 

I had a CPA who called me and wanted to sell his practice. He was a younger guy, but I could tell that he was approaching burnout. He’s probably in his mid-30s, and his practice was four or five years old. It’s pretty common when you reach that four or five-year point to experience growing pains. You’ve built your initial practice, and you shift into exiting that start-up phase. 

I said, “First of all, before you go and sell your practice. I want you to go and take an unplugged vacation and think about this. Think about this decision.” He said, “Okay,” and took a completely unplugged vacation. No email, no nothing. Eventually, he came back with a big decision. He was going to sell all of his individual/personal tax returns that weren’t associated with a business. 

If it was a personal tax return that had no other work associated with it, he put it in a bundle and sold it. In the end, that bundle was only about $100,000 worth of work – but it represented a huge amount of energy, mental bandwidth, and overtime during tax season. I talked to him around six months after he did that, and he’d already replaced all of that revenue with the type of clients that he wanted — business clients. Not only had he collected proceeds from selling unwanted client work, but then he’d made the revenue back in six months. He was working less for the same money and now knew the power of an unplugged vacation. Moral of the story – the solution you’re looking for isn’t always in the work you’re currently doing.

What You Can Do Now

I want you to get your calendar out and pick the time of year where you can take as long a vacation as possible. If it’s two weeks, or if it’s three weeks, just figure that out. Where is it on the calendar?

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:

  1. Seller FAQ: Answers to the questions sellers are asking. From practice value, to timing, we’ve got you covered.
  2. Strategic Guide to Selling your CPA Practice Video: The how-to of selling a CPA firm.
  3. 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.
  4. If you want to chat about your exit strategy, email bball@poegroupadvisors.com with “strategy call” or request a call here.