{"id":79149,"date":"2020-09-07t12:10:29","date_gmt":"2020-09-07t16:10:29","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=79149"},"modified":"2020-09-09t22:02:45","modified_gmt":"2020-09-10t02:02:45","slug":"setting-financial-and-practice-goals-during-covid-19","status":"publish","type":"post","link":"\/\/www.g005e.com\/2020\/09\/07\/setting-financial-and-practice-goals-during-covid-19\/","title":{"rendered":"setting financial and practice goals during covid-19"},"content":{"rendered":"
<\/a>16 questions to consider. by anthony glomski and russ alan prince<\/i> the accounting business was changing even before the onset of the covid-19 crisis.<\/p>\n more: <\/b>4 components of a high-net-worth practice<\/a> | life insurance as part of wealth management<\/a> | mistresses, mister-esses and accountants<\/a> | the coming boom in tax services for the super-rich<\/a> three of the factors that are possibly impinging on your ability to be as successful as you want include:<\/p>\n <\/p>\n the world is engulfed in a pandemic that is transforming business on many levels. this new world is strongly evident in the accounting profession. it is very likely a transformation of the zeitgeist and a tremendous opportunity for capable, forward-thinking accountants. it all starts with what you want to achieve. while we are centered on a $5 million high-net-worth practice, let us think more expansively for the moment.<\/p>\n your financial end-goal<\/strong><\/p>\n let us begin by addressing your goals. you likely have several different goals for yourself and your practice. some of them might deal with the quality of life you want or the impact you are aiming to achieve in society.<\/p>\n we are going to concentrate on the financial aspect of your practice and your personal financial objectives. they are easy to measure, and your financial accomplishments likely impact all aspects of your life.<\/p>\n a commitment to personally building wealth is regularly the core driver of success. now you need to operationalize that commitment. your first steps to “good” or “great” or “greatest” personal wealth are specifying how much is enough. what do you want to be worth? this is your financial end-goal. to reach your end-goal, you will need to take many smaller steps along the way. consider the practice of world-class goal setting …<\/p>\n three guidelines for setting financial end-goals<\/strong><\/p>\n you need to be flexible about your financial end-goals, including the way you think about money and the process of setting milestones. the world has a way of making quick turns, and you need to be adaptable as the covid-19 crisis has shown us. even so, you must remember what you are ultimately trying to achieve. flexibility is necessary, but it is critical to understand that you must not lose sight of your financial end-goal.<\/p>\n the plateau theory of financial unhappiness: <\/strong>as you get closer to reaching your end-goal, there’s more than a good chance you are going to want more. maybe you will want a little bit more, perhaps a lot. most people end up wanting more. it is as if you are climbing to the top of the mountain and you catch sight of the top of the mountain. as you get closer, you find it is only a plateau, and when you look up, you see a new peak. it is to the real peak you now want to go.<\/p>\n if you reach a plateau, what should you do? following the super-rich’s footsteps, you will reset your financial end-goal and establish a new and improved set of milestones. however, this time you will likely need to set the bar considerably higher.<\/p>\n you may need to readjust milestones:<\/strong> if you want a net worth of $10 million or more, that need not change. on the other hand, the intermediary objectives and accomplishments you need to achieve that goal are likely to change. you will likely have to make hard decisions at times and adjust objectives as appropriate.<\/p>\n getting wedded \u2013 emotionally attached \u2013 to milestones when circumstances change can be monetarily fatal, or at least result in severe wounds. on the path to greater personal wealth, you will have to make changes when it comes to your milestones, so be open and as versatile as possible. you might find, as some accountants have, that the milestone of a $5 million high-net-worth practice is not enough. the answer can be a high-net-worth practice producing greater revenues.<\/p>\n keep your eyes on the prize: <\/strong>it is amazingly easy to become distracted by life. even restricting the matter to the business world, it is oh so easy to get wrapped up in the day-to-day minutiae of dealing with clients and your partners so that you lose sight of what you have to do to achieve your milestones. as you confront the setbacks and uncertainties, you may very well forget about reaching your financial end-goal. like you, the super-rich face their own array of setbacks and uncertainties. yet they persevere.<\/p>\n perseverance is essential to significant financial success. becoming personally wealthy requires knowing your financial end-goal and continuously taking action to reach it. do not get sidetracked by the small stuff or even by failures. you need to hold onto your dream and keep moving forward.<\/p>\n 16 questions for your practice and your goals for your practice<\/strong><\/p>\n to begin …<\/p>\n if there is not a gap, stop reading. on the other hand, if there is a gap, you need to determine the ways you are going to close it.<\/p>\n one way to help potentially close the gap is to have a much more successful high-net-worth practice. we titled our book, “your $5 million high-net-worth practice.” why? because the “average” accounting practice of a partner in a medium or larger-sized firm is about $2 million in annual revenues. therefore, having a $5 million practice is a considerable increase. we also know that it is quite possible for you to generate significantly more practice revenues, potentially $5 million or more.<\/p>\n while it very much depends on the compensation model and other factors at your firm, there is still a strong correlation between significant increases in practice revenues and major increases in income. at many accounting firms, such increases go hand in hand with the opportunity for more equity in the accounting firm. we conclude that building a $5 million high-net-worth practice will meaningfully contribute to your reaching your financial end-goal.<\/p>\n moving to your practice …<\/p>\n now, placing a stake in the ground …<\/p>\n again, we expect a gap between where you are and where you want to be. we trust you want to be generating more revenue than you are today. you want to be pocketing more money than you are today. you want your increased production to translate into a larger share of your firm’s profits.<\/p>\n with the intent of building a high-net-worth practice and making more money, the questions become …\u00a0<\/em><\/p>\n the math is probably very straightforward. doing this kind of math is easy. the hard part is …<\/p>\n an excellent way to think about it is by determining what wealthy clients you’ll need to hit your numbers. specifically …<\/p>\n when we have conducted this exercise with accountants, we tend to find that their current high-net-worth practice will not produce the desired revenues. however, when considering their revamped high-net-worth practices, we have heard a range of possibilities from five clients averaging $1 million apiece to 50 clients paying about $100,000 each. it is possible to have more than 50 clients, but rarely less than five.<\/p>\n after determining the number of wealthy clients and what they are paying, you can specify what you are doing for them. we are talking about the range of services and the way you are being compensated.<\/p>\n generally speaking, we have found that most accountants presently are not doing as much as they can with their existing wealthy clients and do not have enough of them to hit the $5 million mark. so, two more questions …<\/p>\n a related question that impacts your answers is …<\/p>\n our purpose is to give you actionable guidelines to help you answer these last three questions and bring in a lot more revenue.<\/p>\n conclusion<\/strong>\u00a0<\/strong><\/p>\n as part of helping professionals, driven entrepreneurs, and even some of the super-rich become ever wealthier, the exercise you just went through is very useful in helping people gain perspective. it is an effective way to drill down on connecting your financial end-goals with concrete actions. with your answers in hand, you have a good idea of what it is going to take to achieve your personal economic objectives.<\/p>\n","protected":false},"excerpt":{"rendered":"
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