With an annual turnover of around £20 million and over 14,500 clients, it’s easy to see why private equity firms were on alert when Mr Simon Dolan decided to put his firm SJD Accountancy, up for sale in 2014. Sold to Sovereign Capital as part of a 100 million pound deal, Dolan, then 45, walked away with a clear £81 million ($144 million AU) in his pocket. But he is the first to admit growth didn’t happen overnight! He also readily explains that he didn’t receive outstanding growth doing things using traditional accounting methods of expansion.
Accounting Firm With One Owner Sells Business for AUD $144 Million Dollar Profit
Now that we are living in 2018 and the world has greatly changed since the days of accountants in the back room with their abacus and pocket watches, is it time to change the way accounting firms run their accounting practice? Dolan, now 49, from Chelmsford, Essex, UK, says, “We used cash flow to open other branches, we never bought anybody, all the growth was organic. It was a nice business with no capital costs – short of computers and people.”
Rather than following in others’ footsteps, Simon has always been a freethinking entrepreneurial type which is what allowed him to put aside the idea of being a partner in an accounting firm and instead choosing to be the sole owner of a business that offers accounting services. His perspective on life has caused him to challenge the English educational system as “pointless and impractical” and being blatantly fault-finding with the pressuring of young ones into taking up a university education in order to get a good job, has made him stand out in ways that most traditional accountants may not. But does that mean ‘traditionalists’ need to be rebels in order to push their annual profits through the roof? Not really, we all have role models, we all learn from others in some ways, you need not behave in the same ways in order to learn from them.
Although Dolan has generally always done things differently to others, it doesn’t mean that you need to have the same outlook in order to thrive. There have been thousands of successful people who made their mark by following in the footsteps of others.
So, What Else Did Dolan do to Increase His Business Growth?
“I made £800 the first month then after I wanted to do £1,000, so if you keep doing that over the years of course it gets bigger and bigger.” He explains that high growth occured from a strong desire to always wanting to make more profit then the previous month.
“Accountants need to move away from the ‘grow your business by hiring another partner’ model,” he says. The partnership model is flawed. “If you look at the Top 50, with the exception of four or five, essentially all they are is 50 individual small firms bolted together. The problem with that is you don’t make much money and it is impossible to make a decision. They should look at accountancy being a business and not as accountancy being something they do.” When Simon needs to make a decision, he can make it in an hour rather than having to gather all the partners together in a room then trying to sell all the partners on ideas and then pray the majority all want to vote the same way. Before selling, Simon Dolan maintained full ownership of SJD Accountancy and was the only non-partnership in the Accountancy Age Top 50+50. His fee income was £14m in 2013 which was up 16.6% on the year before that. Being the sole owner of the business, that brought him in a tidy £14m profit, which happened to outperform KPMG’s at £2.78m per partner.
Dolan’s game plan is clear, “Our particular niche is one- or two-man limited companies, mainly white collar workers. The reason we have been successful is that most accountants want to do something that is complicated. What we do is not especially complicated or varied.”
Dolan, author of How to Make Millions Without a Degree, humbly points out, “I haven’t found accountants to be especially good businessmen….” but that’s not an attack on accountants per say, “…I find that of people in general.” He also emphasises that the crucial point he is trying to make is that there is “no reason to believe they are better or worse than anyone else” at business building. A valid example of this being the strict billing of clients on hourly rates rather than carrying out jobs on a fixed fee basis. Whilst billing per hour is what has always been traditionally the case, accounting firms are making themselves slaves to how many hours there are in a day. By changing the mindset from ‘we are an accounting firm’, to ‘we run a business that happens to offer accountancy and bookkeeping services’, partners of accounting firms can shake off that antiquated feeling associated with accounting practices, and begin their crucial step forward towards driving their business en route to modern ways of billing, and hence growth. Imagine being able to bill higher fees for the same amount of work that your firm is currently doing now. Now that sounds like a way to achieve higher growth without lifting a finger!
An overview of some of the things that Dolan did to build his business:
- Dolan sees himself as the ‘owner of a business that happens to perform accounting duties’, rather than ‘a partner in an accounting practice’ (This change in mindset alone can shift your business to the next level)
- Go for organic growth rather than buying out other firms. This saves on capital costs. (Doing things alone doesn’t have to be worrisome if you follow the lessons learned and advice of others that have found success where you are also looking to thrive)
- Having the drive to want to succeed in business (I must mention that although Simon sold his business and took six months off to live the life of luxury, after the long break he felt “It’s like being a footballer – they love kicking a ball around and they don’t ever want to stop. If there’s something you love, you don’t want to stop.” This natural desire to build something like higher growth can benefit your business.)
- Charge people on a per job (fixed fee) basis rather than hourly charge out rates (enjoying more money for the same amount of work – no brainer!)
“Break free from some of the old ways and see what lies ahead for your business”
If you haven’t already heard, BOSS is now providing accounting firms with a unique offer called the Freedom Service. This is the opportunity to take on a qualified accountant and/or bookkeeper at a minimum of fifty hours per month. All accountants and bookkeepers are charged out on a fixed fee basis giving businesses the foresight of how much the jobs will cost before BOSS begins the work. Consider all budget overruns or financial write-offs a thing of the past! Now that’s Freedom!