Episode 99: Wize Factor Chat: David Burnes - Asset Accounting

Ever wondered how an accounting practice can evolve from a tiny spare-room startup to a thriving, self-sustaining business? 

This week's episode of The Wize Guys Podcast presents an enlightening WizeFactor Chat with David Burnes, the ingenious mind behind Asset Accounting in Australia.

Join us as David takes us through his extraordinary journey, beginning with the modest inception of his firm in the comfort of his own home, to the pivotal challenges and triumphs that shaped his path. He delves into the critical turning points and the strategic decisions that propelled his business forward, providing invaluable insights for aspiring and established entrepreneurs alike.

Don't miss this opportunity to uncover the secrets behind David's success and the lessons learned along the way. Tune in to this inspiring episode and discover how strategic innovation and resilience can transform a small practice into a powerhouse of efficiency and growth.

________________
PS: Whenever you’re ready… here are the fastest 3 ways we can help you transform your accounting/bookkeeping practice:

1. Join 40,000+ subscribers to our transformation Friday tips – Every Friday, our Wize Mentor and Thought Leader of the Year, Ed Chan will send one actionable insight from his experience of building a $20 million accounting firm that still runs without him – Subscribe here

2. Download one of our famous Wize Accountants Growth Playbooks – Our FREE Playbooks on how to build and scale your firm are more valuable than most PAID business coaching programs! See for yourself – Download here

3. Join the waiting list for a free login to the world's best accounting business intelligence software for scaling your firm. Take a look at the app we use to build our own $10million firm in just 7-hours a week – Get a FREE login here

Transcript

Wize Mentoring: 0:02

From Wize Mentoring is The Wize Guys podcast, a show about accounting and bookkeeping practice owners and the many stories, lessons, and tips from their experience of transitioning from a time-poor practice to a business that runs without them. I hope you enjoy and subscribe.

Wize Claudia: 0:23

David, welcome once more to Wize Factor Chat. I am so happy that you made time and some space in your day to meet and chat with me. As I was telling you, we have this space for practice owners who are members of our Wize Mentoring programs, like the white range of programs that you already know. You've been a long-standing member of our Wize Hub and you've been going through our videos, so you've been an example for many members and we wanted to hear what made Wise interesting in the first look. So I wanted to go through some questions and see how it's been from ever since then to what's become and how that's helped you now. So let's go from the beginning. When did Asset Accounting start? Which year? What brought it to life?

David Burnes: 1:18

Back in 2005, I had been working in an accounting firm. I came to accounting very late in life. I did my degree when I was 40 and then I did my CPA. And as soon as I finished my CPA I wanted to be self-employed. That was the whole reason for becoming an accountant. In the first place, I wanted to be in a small business and be my own boss, all that stuff. So I started out from home, in just the spare bedroom with a computer and internet connection. I did a letterbox delivery drop with pamphlets saying hey, I'm your local accountant, give me a call on this number if you need any help. And I walked around the suburb for one hour and when I got back, my first client had left me a message on my phone.

David Burnes: 2:08

Wow, and the phone hasn't stopped ringing since, so I don't know how many years that is. Well, is it really? You know, 2005, 2015,. Getting up to you know, 19 years ago. So that's how it all started. I got a business partner, we moved into business premises and then we just grew the business and so that was all pretty easy really, and then we sort of stalled. We had about four or five years, we had probably four accountants working for us, and our revenue got to about $700,000. And it stayed around that level for a couple of years and we were quite happy with that. We were doing all right.

David Burnes: 2:51

I could have had a pretty lean sort of group. We only had one admin person, no bookkeepers or anything like that, just accountants. And then one accountant left unexpectedly and we had to jump in and take over her work I found out that she had about 30 basses that needed to be lodged at the end of that month and I had no idea that our accountants were doing basses for our clients. It wasn't in the engagement, we hadn't talked about it, we weren't charging it correctly, and so I asked all the other accountants what they were doing.

David Burnes: 3:26

And, yeah, we were lodging about 60 bass. I said, well, this is ridiculous. You know your accountants, you know we shouldn't be doing this, you know, and I'm not charging people for it. So that was sort of my first awakening that we needed to split up our tasks and look at our staffing. So we hired a bookkeeper, took all of that bookkeeping and bass work away from the accountants and our revenue jumped by $100,000 in the next year because not only were we charging correctly for all of these clients who were using us for bookkeepers, but it also freed up the accountants so they could do their work.

David Burnes: 4:04

So I'd sort of already had this awakening. And then I saw some wise mentoring emails and I thought that sounds interesting. As soon as I you know started to read the message about a narrow and deep team. It just made a huge amount of sense to me, because that's what I just discovered that I had the wrong people doing the wrong work. It wasn't getting charged correctly. And I thought, wow, I know that this works. It just made so much sense. And so I joined up with Wize Mentoring and started working my way through the vault.

Wize Claudia: 4:43

Oh, that's awesome. I love to hear that your journey is impressive because something that's very curious. It's a fun fact that many of the people I get to interview tell me it was the deep and narrow team structure that brought them in. It was the thing that changed their mind like they were noticing that their staff structure wasn't going the right way and wasn't as scalable. Mainly so in terms of that, you joined WISE. Which year was this Like? Around a year ago.

David Burnes: 5:14

Oh, it must be no. No, it'd be two, maybe even three years ago. Wow.

Wize Claudia: 5:20

Yeah.

David Burnes: 5:21

So early 2020, I reckon.

Wize Claudia: 5:24

So ever since you started to now, do you feel like there was a certain mindset shift as you work your way through the learnings and leadership culture, anything that resonated with you, but something that was a little hard to get at first, and then you gave in and you said this is probably the way.

David Burnes: 5:44

Yeah, so the big penny that dropped for me was I wanted to hire people who could do what I was doing. And they said well, you know you're trying to find a super person. You're trying to find someone who's great with clients, someone who's technically very accurate, someone technically who's very fast.

David Burnes: 6:04

You know all of these skills and I'm trying to find the person who could do that and I look back at my recruitment and stuff and I've been fairly ruthless with people. I would. If someone wasn't performing, I would sack them. And looking back, once I realized the roles, I thought, oh my goodness, that person was the best finder ever.

David Burnes: 6:27

They were so good at talking to people that come from a corporate background and they could talk the big talk and was really good at that. I sacked them because their technical skills weren't good enough. And the accountant who left unexpectedly was the best grinder that I've ever seen. She could smash through the work. But I was saying to her you need to slow down, you need to be more accurate, you need to talk to the clients, and I realized, oh, you know, there was a. You know I had a finder and I sacked her because she wasn't a grinder. There was a grinder and I sacked them because she wasn't a minder. So it just made so much sense and it has made recruitment so easy for me now. So now I can go out, I recruit a bookkeeper, I recruit grinders, you know, and I'm looking still for minders and finders. So that was just, you know, realizing that and using people' s skills at what they're good at. The penny just kept dropping.

Wize Claudia: 7:27

Wow. That's a huge insight because it's actually, as we speak, with more and more practice owners, recruitment is a huge issue at this time, I think all over the world. You know that we work with Australian firms mostly, but also with firms all over the world the United States, Canada, and New Zealand people as well. So recruitment is a huge issue and the fact that you were able to locate good people for each seat is. As Ed says, I'm sitting with the right people on the right seat on the right bus. I have that stuck in my head. Thank you, Ed.

Wize Claudia: 8:07

Yeah, but that's a huge issue that many firm owners, like you, can see because they're too busy. You know many are too busy to even think about changing people's seats. You know it's like I'm not going to do this. I actually have a question that's coming from that. Now that you know all these things that you know today that you've gone through most of our wise fall, which is amazing what would you say to that David who was stuck and who was not getting these people in the right seat? What would you tell them? Because there are many debits out there?

David Burnes: 8:43

Yeah, it has made my business so much easier to know what roles we need and just trying to fill that role and not trying to find these. You know supermen that can do everything.

Wize Claudia: 8:57

Yeah.

David Burnes: 8:58

And it makes it easier with recruitment when I hire a graduate. So I've hired a graduate in these last couple of weeks and I can show them the structure and I say that through this structure you can see what your career progression is and wherever you're at on this ladder, you're going to have someone above you that's going to be mentoring you.

David Burnes: 9:23

And as you climb the ladder, there will be someone below you that I'll be expecting you to be passing on your knowledge to, and they can look at that and say, wow, I can see the steps in front of me that go all the way up to senior client manager, and I have a senior client manager in my business who started with us straight out of university and she's gone through the whole process. So I think that that's something that is really helpful and it just makes it so much easier for me to manage who's doing the work.

Wize Claudia: 9:57

Yeah, definitely, and this encloses another phrase I'm quoting Ed in, and it's it's easier to build extraordinary systems, which is what you're doing now, than finding extraordinary people.

David Burnes: 10:11

Yes, absolutely.

Wize Claudia: 10:13

And we have a skill set that we're going to. We can develop that. Some things that we're born with you know. But what you can manage and what you can control is have an extraordinary system. So I love that insight from you. Now that you've said that you were able to have a client manager, have a deep in our team structure. Do you feel like you've decreased your working hours?

David Burnes: 10:39

Yep, absolutely so. I'm completely off the tools now. I don't do any financial statements and I'm not reviewing any work either.

Wize Claudia: 10:48

That's awesome.

David Burnes: 10:49

So my senior client manager and client manager is doing all of that and I'm just focusing completely now on the team. So that was one thing that I liked about Ed. He said you know the people in your team. They have to have a client focus, but I have to have a team focus. So all I'm concerned about is building the team. So I've been recruiting for the last six months.

David Burnes: 11:18

And I've recruited a receptionist who's going to be a trainee office manager, a graduate, and two intermediate accountants in the Philippines. So you know, there's our grinders, and you know I was having trouble finding intermediate accountants. I could put an ad on Seek and not even get a single application. There were, just there was no one out there. So then I thought, well, it's silly to complain about it. If there are no intermediates out there, I should go out and make my own. So I went to look for a graduate and found some really, really good candidates, and now I'm going to hire a graduate every year, and every year that will be. I'll make my own intermediates, you know, and they'll come up through my system and learn the process. And so I think anybody who's having trouble recruiting they're not taking a long enough forward view of it. Grab the people straight out of university and then teach them.

Wize Claudia: 12:19

Yeah, that's awesome. You're giving the opportunity to fresh talent, which some jobs even say like we need five years of experience.

David Burnes: 12:29

Yeah, that's right, it gets dark somewhere. And get them and train them yourself.

Wize Claudia: 12:35

Wow, that's awesome. I love that. I wanted to ask you a question because you were present, David, last year and Brisbane when we did our build a business that runs without you tour, where you met Brenton and Jamie in person. They're taller than they look in pictures. I'm sure they thought about this, so I wanted to ask you about building a business that runs without you. Does this phrase excites you? Scares you? Are you looking forward to it? Are you not as needy for that? What do you think about it?

David Burnes: 13:09

No, that's one of the main motivations for me. I turned 61 this year and I'd always said that I was going to build this business and then sell it when I was 60. But after COVID we had such a huge increase of clients and the business was growing so much. I thought this would be crazy to sell this business now, especially when I'm getting a handle on how I can make it run even more efficiently and better, and so it would be much better for me, rather than retiring it just to build the business so that I can step back. So my aim is that I'll still be involved in the business.

David Burnes: 13:52

My job is mainly as a finder, so I'm going to be talking to all new clients and getting them on board, and then I take them through the whole induction process and then I hand them over to their client manager, I introduce them to the client manager and that's where the work happens. Now I can do that work from anywhere. I've got myself a laptop, I'm going to get a caravan. I'm going to go and sit in a villa in Bali.

David Burnes: 14:18

I can still do that role. I can still run this business from wherever I go because we're completely cloud- based. Now. There's all the processes and systems in place. Well, I mean not quite yet, but I'm getting there working on it, I can see that I can keep this business now for another 20 years and the return that I'll get on that, rather than selling the business, it's just, it's tenfold. Yes, it really interests me. That's. My main motivation at the moment is to make myself redundant.

Wize Claudia: 14:52

I love to hear that, that it excites you, and that you're thinking about Bali. Actually, my last question is related to this to building a business that runs without you. Is there any hobby or activity that you enjoy doing that you will get to do more once you're free? I'm guessing that one of those is driving around in a caravan.

David Burnes: 15:14

Yep, so travel is a big interest for us, moving forward, because my wife is the office manager so that's why we've hired two receptionists because we now have two offices and the receptionists will become the office managers as well, Because yet so if I'm going to take her with me in the caravan, she's got to delegate her work as well. A lot of travel, and I think there might be a boat also somewhere in the future, as well as a caravan.

Wize Claudia: 15:44

Wow, I love to hear that and I really wish to see that happening. I'm going to have to check in on you in a couple of years from now to see how's the whole planning going, but I love to sit down with you, David. Thank you so much for all your answers. It was amazing. I'm sure this will be a session Many firm owners will enjoy and many firm owners will relate to what you were saying. So I look forward to seeing you on that caravan soon.

David Burnes: 16:12

Yeah, ok, great stuff, Claudia, Thanks for that.

Wize Claudia: 16:15

Thank you very much.

Wize Mentoring: 16:19

Thanks for tuning in.