Episode 60: How to Achieve the Successful Accounting Owners’ Mindset
"The only difference between successful people and unsuccessful people is just simply the way they think.” - Ed Chan
In this episode of The Wize Guys Podcast, Brenton Ward and Ed Chan with Wize Mentor, Michael Ferris share the best tips on how the structure and system should work for you and not you working for your accounting firm. Also, find out more about mindset shift and mentality.
Timestamps:
0:00 - Intro
0:34 - Tip #1: Ask yourself the question “Why should I be doing this?”
0:55 - Stephen Covey’s principle: ‘But if the principles work, the principles work’
1:28 - Tip #2: Look at the big picture to identify what's more important.
3:03 - Tip #3: Utilize technology through recording video training or instructions.
4:21 - Tip #4: Think the right way.
Quotations:
"Invest in your balance sheet because when you retire, you want your money to be working for you." - Ed Chan
"Where you end up in life is a consequence of the thousands and millions of decisions you make every day." - Ed Chan
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Michael Ferris: Brenton while you're speaking in our weekly tactical meeting, actually recently, my team and I committed to exactly that, and we all got our post-it notes out and stuck it on our screen, which says, should I be doing this? So that's the reminder every time we look at the screen 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. Should I be doing it? So that's helping us?
Brenton Ward: Absolutely. And it comes back to, I mean, it's not obvious that we're massive fans of Steven Covey. If the principles work, the principles work. So we always fall back on them.
Another of Steven's principles is stopping to sharpen the saw, Ed, which is a mindset shift. For most of the practice owners who actually leave wise polls, their reasoning for it is, I really like the content and the resources just don't have time. That mentality of not stopping to sharpen the saw is a big thing. Anything to comment on that?
Ed Chan: Yeah. A very good example of that is that you are so busy doing work or he uses an example of you're really busy chopping trees down in this forest. 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've gotta make sure that you, it's leaning on the right wall.
He uses this other example where, you know, there's this man who's cutting a piece of timber and the saw was blunt and he's working really hard, sweating and just working really hard, trying to cut this bit of timber because the saw was blunt. Then someone comes up to him and says, ‘Why don't you stop for five minutes and sharpen the saw?’ And he says, ‘I haven't got time. I've just got so much work to do.’ So stop and sharpen the saw, which is work on the business and make sure the ladder is leaning on the right wall because you can spend all your life working and then it's leaning on the wrong wall. Meaning, if you are working really hard and just work 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, you've gotta invest in property and in shares. Because when you retire, you want your money to be working for you. We don't do that ourselves. We’re busy working, working really hard in our P and L and we don't look at investing into our balance sheet, which is training our staff, putting in systems, looking at the big picture, and investing in time in the balance sheet, not just working in the P and L.
Brenton Ward: Mick, any comment there that you wanted to share?
Michael Ferris: Yeah, just following on from what Ed's saying, in this day and age, we are very fortunate to have the technology that we have and the easiest way to sharpen the most effective way to sharpen the saw. So A, you're sharpening the saw, and B, you're working in quad two is recording any pieces of training that you do. If you want somebody else to do something, show them once and record it, 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've 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.
Brenton Ward: Day over 21, I tell you.
Ed Chan: Must be my logic cam. It makes me look younger.
Brenton Ward: Yeah. A lot of money in that logic here.
Ed Chan: That's right.
Brenton Ward: Yeah. It makes it. I agree with you then as well.
One of the challenges or the objections we get there is not so much an objection. It's another mindset shift is a success over perfection. With stuff like that, we tend to get into this mentality of, ‘Oh, 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. Then as you say, it's paralysis by analysis. Whereas if we're training on the go and we're recording that training and we're getting it into a centralized intranet 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 it.
Ed Chan: Yeah. I guess depending on where you are in the business cycle. If you are very small and you're starting out, you are obviously gonna have different challenges. If you are a larger firm moving forward, the principles are the same. So if you're a smaller firm, you'll have a foot in each of those boxes, division from one to seven, you might hold all seven divisions. The principle is the same you're moving forward 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. You can't just go to cold Turkey and hi-five people. So you need to withdraw slowly.
So if you are 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 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 from most firms. It's changing from, I need to work, I need to build a business that prepares tax returns, not go in there and prepare the tax returns myself. That's the biggest issue when people 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 gonna have where you end up in life is a consequence of this, of the thousands and millions of decisions you make every day that accumulates and you 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.
I always say that the only difference between successful people and unsuccessful people is just simply the way they think. That might sound very simplistic, but it's not how you think that determines the decisions you make, the decisions you make determine the actions you take, and the actions you take determine the outcomes and the outcomes determines 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 think the way the Wize teaches. And then that will take you down the correct path.