Episode 24: Step-by-step Guide for every Accounting Practice’s Withdrawal Journey
What has changed in the accounting system? What are the latest trends and things to adopt for your accounting business?
In this episode of The Wize Guys, Brenton Ward, Jamie Johns, and Ed Chan talk about Your Withdrawal Journey – building a practice that runs without you.
If you are frustrated in your current situation and don’t feel like you are withdrawing from certain functions quickly enough, our mentors have some advice for you plus the use of WizeHub. Learn more on this episode.
1:19 - How life-changing is the current system for accounting firms
3:17 - Why people are the greatest challenge and asset
4:28 - TIP #1: Train your people to do the job.
6:59 - The importance of stepping back
7:39 - TIP #2: Document everything ~ every process you have.
8:16 - TIP #3: Hone every structure for better leadership, flow, and productivity
11:39 - TIP #4: Encourage bottom-top and not top-bottom hierarchy.
12:39 - TIP #5: Be in control, and not be controlling.
13:25 - What are the danger zones and roadblocks in the withdrawal journey?
13:40 - How money should work for you and your business
15:26 - How to run and manage an accounting business
17:23 - Working IN the business vs Working ON the business
22:23 - How to make the resource mix right
27:08 - Reasons why you should take responsibility
28:21 - How to start building a business that can run without you
34:36 - How to hire strategically
36:02 - Understanding the concept of ‘I don’t have time.’
39:54 - Short-term vs. Long-term/ Urgent vs. Not Urgent/ Important vs. Not Important
42:50 - Top tips for success
“..people are our greatest challenge, but they're also our greatest asset.” - Ed Chan
“Being busy is not the same as being productive.” - Ed Chan
“..the only difference between successful people and unsuccessful people is just simply the way they think.” - Brenton Ward
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Brenton Ward: And kind of come full circle back to design topic, design pillar, I should say. One of the most fundamental accelerators in terms of building a business that runs without you is mapping the withdrawal journey. And that's typically where we start with most of the firms we work with. It's where we start in our Wize Vault journey as part of the 18 steps that everyone has access to in the Wize vault.
But I mean, it's one of the most important pillars in building business, Ed. So I was hoping you might start us off with just a little bit of reflection and insight for the benefit of everyone listening in today. You've worked hands-on with a lot of practice owners in the last 12 months scattered across the world and just wanted to get a glimpse into what's been happening the inside four walls of those meetings. What are the trends? What are the things you can see and anything you'd like to share with the group for the benefit of, their own journey?
Ed Chan: So thanks, Brenton.
Yeah. From, for me personally, the thing that's most rewarding is obviously seeing the firms improve and get better. There's a lot of pain out there where the people are working very long hours and putting in a lot of hard work and, and they're not getting a return on the hard work they're putting in, or, you know, it's taking them away from their family and other things of, or have been hurt by the hours they're putting in.
The greatest thing for me is just seeing how they're improving and changing lives and the systems they're putting in. And, you know, and I, Jamie went from, on a first work premium working 60, 70, 80 hours a week, couldn't take holidays and couldn't even spend time with the family when he was on holidays, he was answering emails and emailing. And today's business is three times bigger than what it was, and he'd done a lot more work in it. So that's great. It brings me a lot of satisfaction when I see owners who follow the Wize way, and they're getting the same results and outcomes and it's life-changing.
So for me, that's the greatest reward that I get out of it. What I see in firms, when we work, it's always the same as it's around people. You know, I've often said that people are our greatest challenge, but they're also our greatest asset. And most of us grew up if you like in the grinding role. And as an owner of a business, we have to know how to manage, but we were never taught to manage.
And part of the reason why it's so difficult is because of structure, and you need height, you need to have structure, you know, and, and I used this analogy when, you know, have you ever seen little five-year-old kids play soccer? You know, they're all chasing the ball. Like there are 20 of them will 22 of them on the field. And they're all chasing the board. There's no structure in place, but then, you know, as they get older, they have teams like you've got a goalie, you've got a fallback, you've got the wingers, you've got the forwards. And then they start playing their positions. And then you, the next stage is you find people who are suitable for those positions. So you don't put a winger in a goalie position, a goalie in the wing of position. So you've got to build the structure for staff to work within, and then you got to place them in the right role so that they're working in their flow. And if they're working in their flow, then they're really happy. And they're really productive. And, and the county firms run flat teams where they're just focusing on the productivity and they just want to throw more bodies at the workload. And it doesn't work. It's, it's, it's a lot more sophisticated in that.
So yes, working with the firms it's around people, but people are around structure because when people work for you, they can do the work, but they need you to lead them. And you've got to put these structures in place that I know what they're supposed to do. And then you've got to fit them in their flow. So they're working within, in their flow, and not working against their flow. So grinder often can be a minder. And if you promote a grinder to a minder, then it's going to be, it's going to, you're going to have problems. And, and sometimes even with training, you just can't change the leopard spots. So you gotta understand all the HR issues. You gotta understand all the structural issues and you know, the coach and, you can't jump on the field and play the game. Then take out a data job of the player and jump in there because they're not doing it properly. You've got to either train them to play their position properly, or you find a new player, and you don't jump in there and take the position. And I see people do that all the time. You know, like it's quiet too, I just do it myself. So they do it themselves. So yeah, it's, it's around people mainly and systems and processes and, and, and, you know, you've got to develop those systems and that's what wise do. It's already all developed. It's tested, and it works. It's been tested for many, many years and it works and you just got to implement it. And that's all the challenges for most practices.
Brenton Ward: And Tim, I wouldn't mind getting some slots from you. If you don't mind. I'm sharing both as a mentor and working with firms as well over the last 12 months. Internally at Causbrooks with your own office, any particular highlights or insights that stand out from your mentoring meetings throughout the year?
Tim Causbrooks: Just the importance of nine, what you want to get out of the business. We begin with the end in mind, and everyone wants different things out of it. And so it's really important to step back. This is probably a good time of the year to do it to step back on another year down the drain and just think about is this getting me closer to my goal? Or what is my goal? And yeah, just take stock. It's very, very crazy and hectic and his industry. So it's really good every now and then, and we do that in the monthly, the monthly board meetings. It as well as a really good example of why they're really good because it forces you to take some time out each month to think about those quad bay and those bigger, bigger picture things about, yeah, that would be, that would be key.
Also just document everything you do. It's impossible to delegate and withdraw unless you document how to do things in the first place. Dark wait until you get the process. Perfect. It's never perfect. Often. I don't realize where the problems are in the process until we start documenting the process. Sorry. Yeah. That's, that's another one that sounds really simple. Jamie, Jamie bangs on about that one a lot, but we've seen huge, huge benefits from doing that this year. I'm going to do a lot more of it than it needed to come.
Brenton Ward: Great. Tell me to say anything from your siblings at TMS, or again from the mentoring you've been doing with firms throughout you.
Thomas Spahbmixay: Yeah. It's been a great year of mentoring and actually have my own board meeting with ed this afternoon. So I have to report in the same way other people report to us, the greatest thing was being able to hone order structures, reporting it through the Fab. 5 KPI allows you to just tell so much from these KPIs and when the structure's in place, it's easier to captain the ship through the fab five. Then if it was like this chaotic marketplace that's going on, because people are just honed in around that. And that's what I found this year with firms where it's all like Ed said, it's about the people, a lot of recruiting, a lot of team designing, restructuring, evaluating people, whether they belong in the right role or not so that they can start honing themselves around targets. And that's, that's been a highlight of that year, this year.
Brenton Ward: Yeah. It's, it's a really good point. You touched on there because, you know, if we look at the fat five and the Wize within the Wize house, which everyone has access to it, if you don't have your own Wize hub set up, I encourage you to get in touch with Selena and we'll set you up with it.
It's been a system that we've developed internally in Sky Accountants in Jamie's practice over the last 10 years with the help of Ed and, and Jamie's fine tuning, but the Fab 5 dashboard, which is driving KPIs and the practice, does take time to implement. And it's, it's another one of these things. It's a code two activity that does take investment, not only from the practice on it, by getting the right people in place in order to fill in, fill the data points and things like that. But once it is in place, it's just such a fantastic tool to be able to have an oversight and manage from a bottom up as, as you would say Ed, and keep your finger on the pulse of the health of the practice.
To encourage everyone, if you don't have your Wize, have your Fab 5 set up to put that on your 2022 project list because it's just a brilliant tool.
Ed, anything to comment on that.
Ed Chan: Yeah, it, it changes like when, when we run our business without the Fab 5, there was always a challenge getting the client managers to take ownership. But as soon as we put the Fab 5 in, it just changed, they just changed. It changed from being an employee to being an employer. And, don't focus on the bottom line, they'll focus on growing the business. So because, we pay a bonus based on the Fab 5 and, and we track the numbers and all of a sudden, a client manager who used to say, no, don't want any more new clients, I've got enough, I've got too much work. Now. I don't want to outsource it. I'll just train someone locally and to. To now, you know, give me more clients and to, let me find someone, an outsource person, because, it's, it allows their teams to be more profitable and therefore they get a bigger bonus, it changes their attitude. And then all of a sudden they're running the business and they, which is what I call management from the bottom up, rather than you doing your brute force from the top down, they're taking you forward. So instead of dragging a horse to water, you're not only leading the horse to water out, but the horses, taking you to the water without any effort on your side. So that's what the fab five did for me, for my team.
So I encourage everyone to, you know, get the five, five going and work you to utilize the folk five, as it should be used as a tool to ensure that the five parts of your business are nice and healthy. So I just, it's all on one page. I just look at it on one page and I knew, I know my turnover is going up. My profits are good per team. I know the cash flow is there. I know that the clients are happy because we've got an NPS, the net promoter score that measures the client's happiness, and an NPS that measures the staff's happiness. So staffs are happy plus happy money in the bank. Now profits are their turnover going up all on one page.
And so you feel in control without needing to be controlling because you don't want to be controlling. You just want to be in control.
Brenton Ward: Ed, I want to come back to the practice owner withdrawal journey. When we talk about building a business that runs without you, we talk about freeing up a practice on a time. When we work, we're talking about working on versus working in all of these terms I use quite freely and loosely when talking about growing a business, but we want to be as specific as possible to the accounting practice owners or bookkeeping practice on his journey themselves. So one to look at the methodical process of withdrawing as a practice owner from this business model. And I think a good place to start is to come back and look at some of the, you know, the major roadblocks or the danger zones as we like to call it in that growth journey to provide some context for the overall withdrawal journey.
Ed Chan: Yeah, sure. So just take a step back. So if you can just imagine in your mind's eye, a line in the middle from top to bottom and on the left-hand side of that line is where you're working for your money. So, the employee works for their money. If you start your own business and you're doing all the work you're working for your money, and then on the right-hand side of that line is where your money is working for you. So when you run a business, it's working for you and when you have investments it's working for you. So your money is working for you.
So you want to go from your left-hand side of the page to the right-hand side of the page. And in order to do that, there's a transition that you've got to go through. And what we find is that at around 600,000, it's your first, an instance in Australian dollars is your first sort of hemorrhage point. And then the next sandwich point is around a million dollars. So most of the firms that pass for help are in these two categories. And if you're able to get through the 600,000, because you've sort of hired more people and they're getting the work done. So, the work is getting done, but then in order to get efficient out of it and to scale beyond that, and generally the next stage is to spend a million dollars is where they, the hemorrhages getting the teams in the right structure and getting the ideal team working in. And there are those two zones that you got to break through generally, and firms generally fall into those two areas.
Wize helps with progressing through those to hemorrhage points. And it is around people it's around your ability to manage. Because as I said, we're taught to do the work, not to manage the work. And then in order to leverage above that, then you've got to teach your staff to work because the first hemorrhage part is getting yourself to learn, to manage, rather than just do the work to break through that 600,000, you've got to upskill yourself to manage. And if you did that and you broke through that, you've got four or five people working for you and you're managing them reasonably well. But then in order to scale that even further, you've got to get your plant managers to learn how to manage that's when you hit the million dollar bottleneck because you now going to teach them how to manage and it's might be able to do it yourself, but it's really, it's another challenge to get them to learn how to manage. And some of them just can't manage. You just cannot change the level of spots. So that's the next, that's the next hurdle. So that graph there very succinctly explains the challenges that most firms face.
Brenton Ward: Yeah. So everyone's on that journey. And most in this room will be as, as we've encountered when they knock on the front door of Wize typically coming to one of those danger points. So on their way towards that, that first danger point, or they've surpassed that one on their own to the second danger point, and the pain points. And I am fairly specific at each of those roadblocks.
But the fundamentals and the journey remain the same. We always come back to building the foundations, the solid foundations of the business, which saw us with the old chart and the seventh division. So before moving into some of the specifics of the withdrawal journey, you might just for everyone's benefit, start with the seven divisions and anything you want to talk about here.
Ed Chan: When you run a business, you've got these seven divisions when you used to be an employee and you used to do the work, you were just working in division four that's production. So you learning how to do the work. You know, you're on this conveyor belt, if you like, and you know, you're producing these which it's called profit and loss and tax returns and balance sheets. So, you learn how to do division forward.
And unfortunately, when you then decided to run your own business in your lift division for, to start your own business, you're now running your own business, just like a great, a big division four. And you're ignoring all the other divisions, mainly because you've not been perhaps not being in a management role. And you've only been doing the work like I was. I was just doing the work. So I ran my business. When I left. There's a big division for just doing the work. It doesn't work because you can't do it by brute force. There are only so many hours in a day that you can get to. So you have to put in structure and systems and processes, and you've got to build this foundation.
And then on the withdrawal journey, you've got to then start withdrawing from these divisions and start replacing yourself in these divisions. And as you replace yourself in these divisions, your workload starts to drop down. So this particular graph shows that when you work in the business, that's that line that goes from the bottom lift, that arrow that goes from bottom left to top, right? And as you can see, that horizontal line is growth or the number of clients that you have, and the vertical line is your workload. And your workload increases as your number of clients go from the lift, to increase. So your in that graph shows from the bottom lift, and it goes up towards the top, right? And until you hit a point where you just, there's not enough hours in a day, you just running out of time and you're hemorrhaging. But when you that's, when you're working your business, doing all the work or the left side of the portrait, when you're working for your money, instead of your money, working for you.
Now to transition across the right side of that quadrant, which is where your money is working for you, then you've got to work on your business, and on your business is that dark orange line. And you'll notice on the left vertical line, that your workload is really high in the beginning because you're working 60, 70 hours a week, and you don't have any more time to work on the business. You say to yourself, ‘Where am I going to get this thing from? There's just not enough time for hours in a day,’ but you've just got to find that extra bit of time. You know, as I found it at three o'clock in the morning, on a Sunday night to design a checklist for my staff to do the work on. And once I spent the hour and designed that checklist, then minimized the mistakes that were being made, because your natural instinct is that you've hired someone to do the work that made a mistake. And you feel like, ‘Oh, I want to just do it myself because they're making these mistakes. And I haven't got time to train them.’
So design the checklist, and I'll minimize that that's working on the business, but you've just got to find some time just to do that. Then the other thing is you've got to train someone to do the work and you go, well, I haven't got time to try. And it's quick if I just did the work. And by the time I've trained that person, I could have just done the work.
Well, that's the wrong thinking because you'll end up just having more and more work to do. So you've just got an hour somewhere to train a person. As soon as you train a person, they know how to do the work. And then what you find is that your journey is that orange line from left to right?
Yes. As you can see, it goes down. And like you, when you work on the business, your work-life starts to go down until the two lines intersect. And at that point, things start to get, you know, much better. So I used to work a hundred hours a week in my practice, and today I don't work there at all. And because now the practice, the business, the assets are now working for you. And that's when it, it, that line intersects, but you've got to make that investment from accounting terminology. You've got to invest in your balance sheet as opposed to working in your P and L. And that orange line from left to right is working on your balance sheet. The line from left to right going upwards is working in your business where you're working in your P and L. So the more you invest in your balance sheet, the lists, the quicker you'll get to that point where the business is making money for you, instead of you having to work for the money, your businesses working and earning your money.
That journey though. It takes a bit of time. It doesn't happen overnight.
And Brenton, if I get you to just show us the org chart again with the different divisions. I'll just type everyone through this. So obviously division four is where the production is happening. And you're also seeing clients, division three, and you spend all your time in divisions three and four, and when you hire somebody to do division six and seven, which is all the admin staff and all that.
So the first withdrawal from your business is your admin. So you need to hire somebody to do the admin, and that's the first withdrawal. So you design all the systems, and the processes, you hire somebody and you train them. And then that takes a whole lot of work off you from a division six point of view, and then the next place that you want to withdraw from is division seven, or the accounting for your own practice, the reports and all that, that you may be doing yourself. So you need to find someone to do that. And if your practice is small or your business is for the same person can do divisions six and seven. In fact, if you're small, you can do five, six, and seven. Now, the next place you should withdraw from is division four, which is the production. So you need to hire somebody to do the production, and then you just do the consulting with the, with the clients. And, but you got to get the resource mix, right initially, because the confusion often is to a higher rate, really junior person, or do I hire a more senior person? There's a tendency to hide a junior person who says costs you less, but that's a bit of false savings because if you hire a junior person, depending on where you are in your business life cycle, if you're still doing all the work and you're hiring another junior person, well, guess what? You've just doubled your workload because you've got to train that person. So that's been a wrong investment. So you should hire a more experienced person to actually take the workload off you. And then that person also trains the next person that you hire, which is a junior person. So you've got to get the timing, right depending on where you are in your business life cycle, as to which person should hire first and often people get it wrong, because they're looking at, you know, the costs and long-term, which is what's going to reduce my workload. And in investment requires you to take a step sideways it a step backward financially in order to take four or five steps forward, you know, so you've got to make that investment. And often people are prepared to take a step back financially in order to take five steps forward. So they go for the least costly person, and that's often the wrong, the wrong move. So, so that's important.
And then once you've got the production out of the way, then you've got to, then you're still seeing the clients. So the next person you've got to get rid of is finding a client manager to see the clients and that's division three. So you're withdrawing yourself from right to left until you end up only doing division one work, which is where I am. I just sit on the board. I go back there once a month for the board meeting, I look at the numbers and then we discuss things that are happening. We come up with a solution or they'd leave, let them get on with it. And then I'll meet with the team again, or the managing partner, if you like again, the next month.
So that's the journey that I've gone through and the journey that Jamie has gone through, and this journey, most people should go through. If they want to have a business that works by themselves or have more choices in their life. They might want to just choose to work in division three or division two. So to give them more choices in life and enjoy your life and not doing the things that you don't want to do, or being a prisoner in your business.
Brenton Ward: Tim, talk to us about some of the aspects of what it's just been speaking about, their withdrawal journey. The biggest part of this is a mindset shift of switching from going to work, to do a tax return versus going to work, to building a business that does tax returns. So where did you guys start with that mindset? You have to have a do reinforce that in your own journey and how are you doing that with.
Tim Causbrooks: Yeah. Easy that's, that's, that's a great question. I don't talk about this much but thanks for that Brenton
The same year I met ed at the beginning of the year. Cause I met Ed at the end of the year. I came back to work on the family business and my job description was literally what you just said to work on the business, not in it. And so from the very beginning, that was my job. I had no idea what that looked like and where to start, where it would get the most return on investment, or how I should spend my time. So it was very, very helpful to have me as a full-time implementer. And just to dovetail that onto like the firms I work with, one of the things Ed will often do is at a bigger firm. Cause I work with the bigger firms he will bring in or get the phone monitor, and bring in a practice manager or an office manager to the appropriate meetings, to help implement those things. Because of the manager themselves, the client manager is still very much involved, in the client communication and the production and sales. So it's really, really helpful if you have a big enough team to actually give someone that responsibility from the beginning, if you don't, it'll take a lot longer, but it'll have to be you and you'll have to find time like ed did to work on it.
The other thing I was going to say was the assumption we have on this withdrawal journey is that someone's already looking after all these things. And that just wasn't the case in my own firm. So that was another really important thing. There's a lot of chaos. There was a vacuum where no one was in charge of the individual seven divisions, the portfolios, it was, it was kind of roll the dice on what the procedure would be, what the policy would be, what the process would be. And so at the same time that we've been withdrawing from them, we've actually been building them out and creating position descriptions to look after those H areas for the first time.
So Ed gave a lot of clarity. I think a lot of owners, including like my own family, had a lot of confusion about how to structure the business at the organizational level. And a lot of the firms I've worked with have had similar questions and some of these firms had been around for quite a while. We were around for 20 years and we still had never really sat down and thought about it. And it's the kind of thing that makes sense to me. There's no point in a firm's history when you sit down and go, I'm going to look at the organizational structure. Now we're all too busy in quad one. I haven't, even if we did look at that kind of, that caught up to the activity of figuring out the organization is people are usually so time poor that there's no one who can really take over assert a certain portfolio, whether it be a counselor or admin or quality.
So, yeah, so that was really, really helpful for me in my own, in my own journey. And it doesn't matter what size you are. You can do a bit of this, you know, even if it's just the monthly meetings, if you join, not with Wize growth, or even if it's like, instead of doing tax returns on a Saturday, do quad B activities on a Saturday. So that's yeah, that helps. But we found that really, really helpful, just getting that structure around the business. So in some ways, those divisions are being run better than they were before we met Ed, and we're not running them necessarily. So yeah. Hope that answers the question a bit, but yeah, it's been a really, really great journey. Yeah.
BrentonWard: That certainly gives it gives us a perspective from yourself, which establishes them with quite a bit of legacy. So, even though you've got the resources and you've got the, you're sitting on a larger fee base, you still have to go through the exact same process and build out.
As you've mentioned that the systems for each of those divisions, Michael, welcome to the clinic, I'm gonna throw you in the deep end, hearing us for some insights from yourself, just in terms of you're, you're a smaller firm, but I'm very high growth. And what you've done over the last two years in terms of growth is fantastic. So you've had to kind of implement these systems for each division on the fly, but also re-start to withdraw yourself at the same time as the business owner. Any insights from yourself? And in that sort of, if we go back to this journey here, moving towards this first day in design, which is kind of where you're heading and pushing through at the moment. Any insights on that withdrawal journey and any of the challenges you've had to overcome as part of that?
Michael Ferris: Yeah. Thanks, Brenton. I'll try and pretend like I'm up to speed, but I actually I'll just reflect on, on my own journey, and hopefully, that gives some, some value to everyone who's here. Just back to that previous slide there, my budget of 700, this, so I'm right in the thick of the danger zones and I've, I'm wearing the two hats as CEO and senior client manager still just got to keep pushing and get to a stage where I can replace myself as a senior client manager and then get out of all of division four and division three with a bit of luck.
So, yeah, it was really interesting when I started, I started with Wize growth in January 2020. And I remember saying to Jamie, how long is this going to take me? When am I going to get there? And, you know, that's what everybody wants to know. And really, you can't put a timeframe on it because every firm's different and every firm that I'm mentoring one-on-one in the growth journey are all single-team firms at the moment.
And some are right at the point where they're splitting to a second team, if they can find the people and some are, you know, earlier on in their journey than me. So I guess from my perspective, the number one thing that we can rely on is the Wize vault, and those 18 steps, you know, Wize really does give you the journey mapped out. It gives you the blueprint. And when I came in there and Tim was speaking, you know, it's all about getting out of one division at a time, trying to spend as much time in quad two as you can, which is the important, but not urgent work. I really liked that tip to Tim to quote two on a Saturday, not tax returns. That's fantastic. But yeah, for myself, it was, I hired admin and just got out of division six, as fast as I could. And then I handed over division seven as well. Fortunately, the admin was capable as a bookkeeper, et cetera. So other than the final sign-off on my tax returns, all of that's done for me as well. So that just takes a whole chunk of admin away, which allows me to focus on those other divisions and particularly the CEO role.
Brenton Ward: I want to get it from your perspective. Cause a lot of them, a Gucci of the practices in here at the moment at are at a similar size. So like I wanted one of them to hear because when you hear from, sometimes it's from the likes of Tim way, having an established business and you have the well not a well-established business, but a larger business, a larger fee base. And the assumption is, well, you've got the resources there to work on this as opposed to when you're a single-person team, you're still the same senior client manager, et cetera. It's a different scenario. But I mean, at the end of the day, the fundamentals, the core principles, the journey is this is the same. Yeah,
Michael Ferris: Just Brent. And just on that, you're talking about getting people into fulfilling some of those roles. The Wize ideal team is fantastic without that goodness knows where I'd be. Because when I started, I had a couple of team members over in the Philippines and one experienced accountant onshore. Who's now the most assistant client manager. And since then I've hired got another straight people. I forgot exactly how many, but the point is that the ideal team told me who to hire and when. Otherwise, I would have just been falling into the trap that everybody falls into, which is throwing bodies at problems, which is you've got work pressures. So they think I just need more people, whereas you can follow the ideal team and everything that ed has shared with, with everybody, then you'll make sure you're hiring strategically, not just for the sake of it.
Brenton Ward: Absolutely. They say I think it comes back to the way in which we suggest the Wize plan, the 18 steps you can't pick and choose which one feels comfortable and feels, right. We'll just slot that piece into your practice. It's very much the jigsaw puzzle where the pieces, do go together in a particular way. And when they click definitely for the benefit and the greater good of the business and your own livelihoods and well-being so strongly, highly recommend going methodically through those steps as we've structured them out.
Brenton Ward: I want to switch gears a little bit ed to, to the topic of time because it's still our number one challenge. It's still our number one objection. When we're working with them, I don't have enough time to implement the steps that you're recommending, but the things that you're recommending, the advice that is suggesting, I just don't have time to do it.
So again, the whole moving from working in the business, working on the business, it's a very bay at the surface where everyone understands the term. But when it comes down to specifically how we do that in an accountable keeping practice, freeing up time or where to focus time is one of the biggest things we focus on at the beginning of anyone's journey.
So can we come back to how we look at personal time management and, and this journey of freeing up time to get to a point where we can start that withdrawal journey and accelerate through it?
Ed Chan: When my practice was really small and I was really working over a hundred hours a week. You're just overwhelmed with just not having enough time. And as I said earlier, where do you find time to work on the business when you don't? And I think Mark already touched on, you know, we should be working in quad two, which is important, but not urgent and activities in the quad to like training someone training. Someone's not urgent, but it's important. And we tend to just do things that are urgent. So tax returns they're to get it's urgent and it's important. So we jump in there and do it correcting a mistake it's urgent and important.
So we just jumped in there and put it out that far or fix the problem. But we don't have time to do the quad two activities, which is the train that person because it's important, but not urgent, but where were really effective businesses working, using quad true to it's in those activities. If you spend time in those extra quad two activities, then you have listened. There are fires to put out over time.
So developing a checklist it's important, but not urgent. That's working on the business. And the more he is working quad 2 the less you, work in quad one. So today I only work for quad two. So the thing I'm doing today is training firms like yourself, which is important, but not urgent. And so anything that's in quad one, I don't do. I delegate to somebody else. And I only do the things in quad two, which are not urgent, but important or the preventative activities, managing client's expectations, and educating clients are important, but not urgent. Then the more you're working quad two the less you're working quad one.
Ed Chan: Yeah. So just going back to what you said earlier is not having enough time. So what helped me manage this? Because you're overwhelmed when you go to work. There are a lot of activities, but what's really important is to identify. There's a lot of stuff that you do that shouldn't need to be done. Being busy is not the same as being productive, especially in administering in the admin area, there's a lot of work that gets done that doesn't need to get done. And people, Saturday, I'm so busy. And as I said, have you ever been busy all day? And at the end of the day, you felt like I haven't done anything well, it's you because you've been doing the wrong kind of things. And there's a lot of work that shouldn't be done. And if it's not producing an outcome, just don't do it.
So what helped me when I was just overwhelmed with everything was to break it down into bite-sized pieces. So short term, medium term, long term. In the short-term yes, you got it. It's all hands on deck. You got to get the who clients are screaming and mistakes need to be fixed up, but then you always got to have at the back of your mind what the long-term agenda risk. The long-term agenda is to have people trained up in the right seat, on the right bus. And they're doing all the work. And that helps you determine the medium-term journey, which is yes, you've got to put out the fires, get the work done. But then at the same time, medium term, you're looking for the right people to put in those rights seats. And you've got the ideal team structure to work with and you're looking for people.
So your journey is from “I don't have enough time to do other work too. I've got to find good people and they're there. All I do is just wherever I drive my wife. And that's because I go to a restaurant and the waitress comes up and she's really good. And I say, shit, I'd have her in my house, in my business. I'd like to hire her.” And so I'm talking like this, or the time is now, my thinking has changed from, the workload through to how we're finding good people.
I'm just constantly looking for good people and placing them in the right seat, in the bus, in, in my business, and picking as good people, just so hard to find. And, but if they have, if they have the right attitude, you can train skills, but you've got to start with attitude first. And if you get the right attitude, you can always train them. And, I drive her nuts because I'm always talking about I'd hire her and she'd be fantastic. And my business and she's going, let's just have some lunch, can we?
So you're thinking changes, doing the workload to finding and training people. So that's important. So you break it down only to meet short term medium term long-term the long-term goal is to have all these people in the right center, right bus, just running the business and it's running from the bottom up and they're running it and they're driving it. And then the short term is just getting the work out the door. But with an eye on, you know, finding people, constantly finding, looking for people and recreating them and training them in a short term. And then if you do those in that sequence, then your end up long-term because often it's very easy to get really, really busy at work. And then you just put fires out constantly. And, you know, when you're 65, you're still putting fires out because you haven't worked and invested in your balance sheet, which is the medium to the long-term side of things. You've just been putting fires out and working in your P and L so to speak.
Brenton Ward: That makes perfect.
And I think it's just something that needs to be a constant reminder to the point where we're going to just think that there is, you're talking there, but we want to design up some posters for you guys to, to, to reinforce the time management quadrants that you can put in your offices, the screensaver in your wallet and your journal, wherever you like, because it's something.
If you ask Jamie about his journey of focusing on these time management quadrants the time management quadrant needs to have a post-it note on his screen at all times, reminding him, what quadrant am I working in? And for everyone, again, reverting back to the why. So there's a fantastic tool within the Wize hub, which talks about the quadrant activities and starting to create a log of those activities and actually dissect and analyze where you're spending your time, which will help you then transition those activities and move through the delegation process, which we're also spending an of time on in the background at the moment as well, building out some processes for you on that.
Brenton Ward: Guys, any insights, and from your side, Thomas, Michael, Tim? Anything you wanted to share on this time management quadrant?
Michael Ferris: Brenton, while you're speaking, in our weekly tactical meeting actually recently, my team and I are committed to exactly that. And we all got our post-it notes out and stuck them on our screens, which says, ‘Should I be doing this?’
So that's the reminder, every time we look at the screen just to, and that's in the spirit of what Ed said, we need to change our thinking. That's not what we do. It's what we're thinking before we even do anything out, should we be doing it? So that's helping us.
Brenton Ward: Absolutely. And it comes back to me. It's not obvious that we're not massive fans of Stephen Covey much, ‘but if the principles work, the principles work,’ so we always fall back on them. But, you know, going to another one of Stephen's principles is ‘Stopping to shop from the soul.’ It is a mindset shift.
Most of the practices that actually labor-wise, their reasoning for it is I really liked the content, the resources of just opened up time and that, that mentality of not stopping to, and it was sore is a big thing. Anything.
Ed Chan: Yeah, a very good example of that is you're so busy doing work, doing work, doing work, or he uses an example if you're really busy chopping trees down in this forest. And then, and then if you don't look at the top, you might be in the wrong forest and you're busy chopping the forest away, or you're climbing this ladder to get to the top, but you've got the ladder leaning on the wrong wall. So you're to make sure that you're leaning on the right wall.
And he gives us this other example where, you know, there's this man who's cutting a piece of timber. And the sole was blunt, and he's working really hard sweating and just working really hard trying to cut this bit of timber because the sole was blunt. And then someone comes up to him and says, why don't you stop for five minutes and sharpen the saw this, I haven't got time. I've just got so much work to do so stop and sharpen the soul, which is work on the business and make sure the ladder is leaning on the right wall because you could spend all your life working and then it's landing on the wrong wall, meaning that if you're working really hard and just doing all the P and L stuff, working in your business, then when you're 65, you're still working in the business, doing all the hard work because that ladder is leaning on the wrong wall. So make sure you look at the big picture and what's important. And what's important is to invest in your balance sheet.
it's no different from you telling your clients, that you've got to invest in property and shares because when you retire, you want your money to be working for you. And we don't do that ourselves. We were busy, in quite a, or in the first working really hard in their P and L. And we don't look at investing into our balance sheet, which is training our staff, putting in systems, you know, looking at the big picture and in investing in time in the balance sheet, not just working in the P and L.
Brenton Ward: Mike, you had another comment there that you want us to share.
Michael Ferris: Yeah. Just following on, from what it's saying in this day and age, we're very fortunate to have the technology that we have. The easiest way to sharpen the well is the most effective way to shop at the store. So are you shopping the store and be working in quad two is a record any pieces of training that you do, if you want somebody else to do something, show them once and record them, and you'll never have to show them again. So that's a huge advantage for us in this day and age. I'm sure Ed would have liked that a few decades ago. I won't say how many, when he was probably dictating steps to someone in admin, for example, to create a checklist.
Ed Chan: Yes. The internet wasn't around before the second world war 2.
Ed Chan: It must've been my logic cam. It makes me look younger.
Brenton Ward: I agree with you that might as well. And one of the challenges or the objections we get there is not so much an option. Sorry. It's another mindset shift is the success of perfection with, with stuff like that. We tend to get into this mentality of, ‘Oh, well, we'll do, we'll do training videos when we've got time to do them nicely. We can produce them nice.’ And they'll all be perfect, but that never gets done then. And then, as you say, they make its process paralysis by analysis. Whereas if we're with training on the gum, we're quoting that training and we're getting it into a centralized internet system of some form. Then it's there. It's done. It's already there. So, looking at it from that angle, as opposed to wanting everything to be perfect is a good way to look at what.
Ed Chan: I guess depending on where you are in the business cycle, if you're very small and you're starting out, you're obviously gonna have different challenges too if you're a larger firm moving forward, but the principles are the same. So if you're a smaller firm, you'll have a foot in each of those boxes divided from one to seven, you might hold all seven divisions, but the principle is the same as you're moving forward is to replace yourself as your business is growing.
So you need to do it slowly, in conjunction with the cash flow that's coming through. So you can't just go cold Turkey and hire five people. So you need to withdraw slowly. So if you're in production, you still have to do production until you've got someone to do production, and then you step away from it. You manage your withdrawal journey together with your cash flow. So it's important that you do both at the same time because if you don't, you're gonna end up, you know, in trouble from a cash flow point of view, but it's really, I find that that's not the issue. The biggest issue is the change in mindset for most firms is changing from, I need to work. I need to build a business that prepares the tax returns, not go in there and prepare the tax myself. That's the biggest issue where people will move from the left quadrant to the right quadrant, moving from working for their money, to getting their money to work for them is a mindset shift. If you can get that mindset shift, then everything falls into place. If you don't have that mindset shift, then it's a big struggle because you're going to where you end up in life. It's as a consequence of thousands of millions of decisions you make every day that accumulate in and in your end up where you end up in life by those decisions you make and the decisions you make depend, it comes from the way you think.
And I always say that the only difference between successful people and unsuccessful people is just simply the way they think. And that might sound very simplistic, but it's not how you think determines the decisions you make, the decisions you might be termed, the actions you take, any actions you take determine the outcomes and the outcomes determine where you end up in life. So start thinking the right way. Start listening to the videos and start reshaping the way you're thinking and thinking the way Wize teaches us. And then that will take you down the correct path