Withdrawing yourself from the right divisions in your firm

Ed ChanFounder & Non-Executive Chairman, Chan & Naylor

Every activity within your practice requires, at some stage, trust to let someone else handle it—from doing your client's work, to letting someone else do your own work.

But what if there is too much information disclosure? That’s a fair question. Remember: there are millions of businesses out there where certain employees have access to private information. This is not unique.

The focus should be on hiring the right people, rather than worrying about what a bad employee will and will not do.

Yes, there are good and bad employees, but it’s about identifying the right employees. This is the challenge that all businesses are faced with.

If you experience a bad employee, your success rests on being able to ‘get back on the horse’ until the right employee is found.
Ed Chan, Wize Mentoring

Otherwise, you will never let go, and will remain a prisoner of your business.

In my experience, working on my business instead of in the business was a better utilization of the wages that were paid to me. Separating ownership from occupation will help put a value on your time.

To prevent yourself from being a prisoner to your business, and spend your time improving your business, you not only have to hire the right people, but you must withdraw from the different divisions in your firm.

Understanding the divisions

To scale your firm, you must operate with the following seven essential divisions:

1. Board of Directors

This is your leadership team. As the firm owner, this function should ultimately be the last one you withdraw from.

2. Marketing

A goal of marketing is to bring consistency between who you are, and who you say you are.

3. Sales

Your sales process is how you convert someone who is interested in your services into a paying client. In a firm’s early stages, the founder commonly takes on this responsibility.

4. Production

This is the engine room of your accounting firm. It’s responsible for delivering the services that your clients are paying for.

5. Quality (Client Success)

To make sure your accounting team is providing the level of service you expect, you’ll need to build a process for client success.

6. Office Administration

As your company grows, so do the tasks required to keep a business operating.

7. Financial Reporting

An internal financial reporting function is crucial for decision-making. This will guide your hiring decisions and ensure your profitability is where it needs to be.

Withdrawing from the right divisions at the right times

The sequence in which you withdraw is different for different people. The reason for this is because it depends on many variables specific to your situation, including the type of people you currently have working for you.

For example, if you have someone who has good people skills then you can appoint them as a Senior Client Manager immediately. But if you do not have that person on board, you will not be able to withdraw from Division 3 (Sales) just yet.

Normally, the easiest role to hire for (which also happens to be one of the lowest cost roles) is your admin staff, which falls in Division 6.

As a result, Division 6 (Admin) is the most common division to withdraw from first. This is followed closely by Division 5 (Quality) because usually, the admin person (Division 6) can also deal with surveys and organizing training sessions for the production team and dealing with the IT contractors (all in Division 5).

The next most common division to withdraw from tends to be Division 4 (Production) as it's easier to hire Grinders than Finders, which belong to Division 3 (Sales).

Recommended reading: What are Finders, Minders and Grinders?

The reason Division 4 (Production) is withdrawn from before Division 7 (Financial Reporting) is that most owners want to continue to do Division 7 themselves, as they may not want an employee seeing their financials. However, I personally never had this problem, and I did not really mind other people seeing my financials, so I withdrew from Division 4 and 7 as soon as I could.

Division 3 (Sales), which requires Senior Client Managers, is the penultimate to withdraw from because they are the most difficult people to recruit—they need people skills and they deal with clients, so owners tend to hang onto this role the longest.

Hiring the right team for Division 2 (Marketing), and then withdrawing, comes last. This is because the first general challenge is to ‘get your house in order’, which involves every other division first.

Once you have your house in order, you can start looking at how you can grow their business.
Ed Chan, Wize Mentoring

Once everything is under control, meaning work is getting done, your firm is getting great survey results from your clients and things are humming along nicely, then you can look to grow.

The goal is to just ‘live in’ Division 1 (Board of Directors), which requires a monthly meeting (around 2 hours) with the CEO, and you’ll receive a monthly dividend or profit share.

Not a one-size-fits-all

Overall, the above journey is not set in stone as there are many variables that determine which division comes first, second, etc., but what I have mentioned above is the most common withdrawal situation.

Ed Chan
Founder & Non-Executive Chairman, Chan & Naylor

Ed started Chan & Naylor from a small home office in Sydney and grew it into a National Financial Services Organisation that now works without him, with offices in most capital cities around Australia, servicing more than 10,000 clients.

In 2018 he co-founded WIZE Mentoring, a network for accountants who want to know how to successfully grow their firm and have it run without them.

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