Choose your partners wisely, play the long game and create a solid support team. These are among the top 5 tips for building a business shared by Guy Biran, Managing Partner of JMp Accountants, a mid-sized accountancy firm that handles complex tax matters for some of Australia’s most dynamic businesses and wealthiest individuals.
Guy Biran owns a mid-sized accountancy firm that handles complex tax matters for some of Australia’s most dynamic businesses and wealthiest individuals. In 2009, his business, JM Partners (since renamed JMp Accountants), was listed on BRW’s Fast (growing) 100 list. He’s also a director of Catchoftheday Group, Australia’s number one e-retailer. Here the Israeli-Australian former soldier shares what he’s learned, often the hard way, about growing a business.
He cautions being careful what you wish for when it comes to managing growth. “I’ve worked with a lot of business that have grown fast,” he says. “The owners have made a lot of money, but they’re not necessarily any happier. I enjoy having contact with clients, being involved in the start-up space, and sharing people’s journeys towards success. I’d never want JM Partners to get so big that I couldn’t do those things anymore.”
His top tips for managing growth
1. You need to choose your partners wisely
Biran has entered into two significant partnerships during his career, both of which didn’t end well. “Businesses, especially family ones, where there is complete trust between the partners and people are working together well are a force to be reckoned with,” he says. “Unfortunately, I’ve twice found myself fighting rather that working with partners. That held the business back and depleted my energy. I now don’t have any equity partners. I do want my best staff to aspire to an equity partnership and I’m open to that. That said, I can’t imagine having an equal partner again unless they were making an equal contribution to generating revenue and sharing all the headaches.”
2. The same goes for your merger targets
Biran has always preferred organic growth but has acquired other businesses. “You learn from your mistakes,” he says. “I don’t have a background working for one of the Big Four, where you get experience working with the kind of larger organisations I was looking to start targeting. So I bought a firm that did have those big clients and knew how to service them.
“Shortly after the purchase three of the accountants resigned. The firm’s files, which were all paper, were a complete mess. It consumed huge resources to convert them to digital and sort them out. While that was happening many of the clients got frustrated and, understandably enough, went elsewhere.”
3. Playing the long game pays off – eventually
He believes in targeting a niche rather than seeking to maximise revenue by creating a one-stop shop for customers. “Maybe I’d been making more money if I’d expanded into financial planning or mortgage broking,” he says. “But I enjoy dealing with tax matters. Also, I never felt comfortable about the potential for conflicts of interest to arise if, for example, my business was pocketing a commission while providing financial advice to clients. So I’ve stuck to my guns and focused on tax. Clients are smarter than they are often given credit for. They understand the value proposition you’re offering and whether they can trust you. If you look at the quality of clients, the business now has and the type of testimonials they are happy to provide, my approach has paid off.”
4. Outsourcing is useful, but not a magic bullet
“My business wouldn’t be where it is now if we hadn’t been able to outsource,” says Biran. “That said, we put a lot of planning into it. I didn’t just buy a product off the shelf from India. That’s probably why, unlike a lot of business owners, I don’t have horror stories about outsourcing gone wrong. A colleague who worked in Vietnam opened a new facility with his partner and we were in the right place at the right time to start using those services.We then spent a year working out what they could do well and developing the appropriate systems.”
5. You need a solid support team
When Biran’s last partnership ended, he went looking for another bank. “I approached NAB and after examining my books, they said they would step in and take on the role my previous bank had played. Now, I’ve got a business banker who understands both my business and me.”