How to recession-proof your accountancy practice (part one: choose the right mindset)
As an accountancy practice owner, you know that you should be prepared for tough times, but do you always take the necessary steps? Take the 2008-09 recession and the current Covid-19 pandemic as primary examples; many accountancy practice owners were and are being hurt by these recessions. So how can you do things differently? What steps can you take to prepare your business to weather this storm, and future storms, so that you can emerge from them even stronger? These are the two most common questions that we are being faced with lately, hence the reason for this article series. This article series is based upon a webinar we did with GI on how to recession-proof your accountancy practice. Click here to download the whole recording. Here is part one of a four-part series on how to recession-proof your accountancy practice.
Step 1: You need to choose the right mindset
Henry Ford said, “whether you think you can, or you think you can’t – you’re right.” What he’s talking about here is the power of mindset.
We all know that having the right mindset is important; we all know that our inner voice has the power to hold us back, and we all know that those who achieve great things (insert the successful person of your choice here) they strongly believe that they can improve and grow and that they will be successful.
And this applies to everything, not just getting through a recession. Our attitudes determine whether we will be successful or whether we will fail.
How to choose the right mindset to get through a recession
If you want to recession-proof your accountancy practice, you need to have the right mindset. The mindset that will get you through the storm and out the other side, not the one that will result in you having to abandon ship. So how do you do it? How do you choose the right mindset?
1. Determine the mindset that you already have
Before you can change your mindset for the better, you need to know what mindset you currently have. You need to identify what your ‘inner voice’ is saying, what your self-limiting beliefs are, and what your current habits are.
When Covid hit and maybe even now, is your inner voice telling you “oh no, I’m not going to survive” or “the recession is going to hit me hard” or “I don’t know what to do to make it through the recession?” According to Stanford Professor, Dr Carol Dweck, her research shows that traditionally people do tend to have a “Fixed Mindset.” This means that people default to traits and qualities that are set early on in their lives.
It’s very easy to find comfort in these self-limiting beliefs that we have. And that’s what it is, it’s comfort. Attitude is very contagious, so with all the doom and gloom that we are being bombarded with from the media, it’s very easy to be overcome with this negativity and to think “well, it’s out of my hands, there’s nothing I can do.”
While this might be the case for a small number of people, it’s not the case for many of us! It just takes a change in mindset.
2. Work hard to nurture the mindset that you need
Once you’ve identified what your current mindset is, you can now work hard to change it. Going back to Dr Carol Dweck’s research, she shows that it takes three things to be able to do this effectively: determination, an openness to learning, and a willingness to risk mistakes for the sake of knowledge and change.
If you have these in your arsenal, you can soon see that abilities and qualities aren’t fixed early on. They are just a starting point for us to build on. When you’re open to learning and developing your abilities, you will soon start to foster a “Growth Mindset.”
So bringing it back to you being able to recession-proof your accountancy practice, the first step is overriding your default mindset and nurturing a better one; one that will allow you to overcome this challenge and grow your practice. To help you develop a Growth Mindset, here are a few things that you can do:
- View the recession differently – while you may be losing business in the recession, take a look at the business you are losing. Typically, recessions are a cleansing time where you tend to get rid of the deadwood clients, the ones who make the most noise and take up the most of our time but who we perhaps don’t like to work with or who pay poorly. If this is happening to you, see that as a good thing. It allows you to get back to your core business and it gives you more time to focus on more valuable tasks or clients.
- See the positives as much as possible – yes, things are tough, but try to focus on the positives. Business is still going on so there are opportunities for you to grab with both hands. Potential clients may not like the service they are getting with their current accountant, so this is your chance to show them why they should come to you. With the recession forcing everyone to stop, it’s given accountancy owners time to think laterally and creatively. It’s forced us to focus on what really matters to our business.
- Re-frame your self-limiting beliefs – pay attention to your thoughts and see if you frequently tell yourself things that makes you feel bad or that affects your productivity or success. If you can identify patterns, this is the fixed mindset and this is what you need to work on. For example, if you often say to yourself “I can’t do this, I’m going to fail,” practice replacing that with “I can’t do this YET, but with time and learning, I can learn what will help me to succeed.”
Need more ways to develop that growth mindset? Read on…
- Be proactive rather than reactive – while changing your language is important, it is even more essential to follow this up with action. If you don’t, then nothing will change. When you come across a challenge such as ones that have been caused by the aftermath of Covid, rather than reactive negatively, think “how can I innovate? How can I do things differently?” Once you’ve identified a different approach, such as a way to adapt your service so that you become essential for your clients, now you need to outline the actions you need to take to make this happen.
- Create a new plan and set yourself new goals – a new vision and goals will help motivate you to recession-proof your practice. Often, not knowing where to start is what keeps people stagnant, so create a new plan. Not only does this give you a sense of direction and a fresh perspective, but it also ensures that every decision and action you take will move you closer to achieving these goals.
It’s not easy to change your mindset and it will take time and effort, but it’s possible. According to the British Journal of General Practice, it takes on average, 66 days to form a habit. This means, 66 days of replacing your self-limiting talk with your new growth statements, seeing the positives in your situation, being proactive and taking small steps every day towards your new goals.
After this, your Growth Mindset will come naturally and you’ll see the positive impact of this whether in the growth of your practice or new opportunities that come your way.
3. Surround yourself with people who lift you up
As we said previously, attitude is contagious, especially when negativity is forced in your face every minute of every day, so surround yourself with people who lift you up.
Whether it’s friends or family or colleagues, find people who are positive and who comfort you. Find people who you can vent to but who then help you to turn these frustrations into action. You’ll need people who will hold you accountable but who will also not judge you for your shortcomings and who will pick you up and support you when you need it.
Having a support network is so important because it is very easy to talk ourselves into doom and gloom. It’s very easy to have a pity party for one but that doesn’t get us anywhere. By having a community where you can share your problems, you are far more likely to be successful in picking yourself up so that you can get back on track to reach your goals.
A support network provides emotional support, love, reassurance, acceptance, encouragement, and different perspectives which, in turn, helps us to create a more complete picture of a situation so that we can cope with it or overcome it. In simple terms, we all need help and it’s incredibly empowering and motivating to know that people are going through the same thing.
4. Reconnect with your ‘Why’
If you want to recession-proof your practice, you need to reconnect with your ‘why.’ It’s important to do so now more than ever as Covid has caused a lot of uncertainty. Even 7 months down the line (since lockdown began), there is still a lot of uncertainty that is causing us to feel lost and out of control.
According to Forbes, when interviewing over 4,000 of the world’s most influential leaders, the most common link is that every leader has a strong clarity around their true purpose and their actions are focused around supporting that ‘why.’ It makes sense when you think about it, as knowing your ‘why’ gives you a clear path to achieving your goals.
To get through such a storm as a recession, you need to reconnect with why you started your practice. Grab a pen and write down why it is you’re doing what you’re doing, what or who you are doing it for, and what it actually means. You could even go further and write lists of what it is that gets you out of bed in the morning, what drives you, and what makes you come alive (more help here…).
Perhaps you could do this with your family and your partner too. Reconnect with them. Any insight you gain here will only seek to motivate and empower you to succeed, but it will also help to put you back on the right path to success.
5. Appoint a war cabinet
You need a ‘war cabinet’ if you want to know how to recession-proof your accountancy practice because, without a war cabinet, you’re less likely to win the war.
When we say ‘war,’ we are talking about the recession, and when we say ‘war cabinet,’ we are talking about a group of people that you can trust, who can advise you to get through this difficult time. By having a few different people who can provide you with different perspectives and give you different pieces of advice, you have a better chance of navigating through the storm.
Your war cabinet may be made up of people who are already within your firm or it may be friends that you know who have a profession that can help. Whoever you bring in as your trusted advisors, they need to be able to help you answer those difficult questions, such as “how can we innovate?” and “how can we do things differently to adapt to our situation?” They need to be able to help you be more decisive as the decisions you make now will impact you most for the future.
Recession-proof your accountancy practice by choosing the right mindset
You may not think about mindset when you’re asking yourself how to recession-proof your practice, but it is absolutely critical for building a strong and positive foundation for growth. The recession is hurting businesses, it’s forcing them to put everything under the microscope and to focus on the things that really matter, but ultimately, this is a good thing. You can either cut overheads and freeze bonuses and let staff go – i.e. let the recession happen to you – or you can see this as an opportunity to improve and to do things different – i.e. emerge out of the recession stronger and more successful ready for the economic upturn when it comes.
If you choose the latter, part 2 of the blog series ‘how to recession-proof your accountancy practice’ outlines why you should be increasing your marketing during this time (and other key tasks of an accountancy owner during a recession).
Get your practice ready to thrive in a recession
Download the recording of ‘How to recession-proof your accountancy practice’ and you will discover:
- The top 3 areas to investigate to find the quick wins to cut your firm’s cost base
- Ways to reduce your practice overheads without having to make anyone redundant or reduce their hours
- How to get 4-8 decent leads every month without having to spend a fortune on marketing OR spend all your time on marketing – even if marketing and sales is your weakness
- Advice on how to make the time to recession-proof your accountancy practice even if you are overwhelmed with client work right now
- How to get clients to pay for the services they need even if they plead they have no money