Sometimes less can be more
Integra Business Accounting was faced with stalled growth as the economic slowdown and disruptors hit its client base. Here’s how they tackled the problems.
Strategy: A combination of strategies involved downsizing the business and repositioning services to meet changing client demands.
Result: Profits are up despite reducing staff. “I’ve run this business for 12 years, so I’ve hit a growth wall a couple of times,” explains Angela Fritzsch, director of Integra Business Accountants.
The first was in 2009 when, with a staff of three, she decided the right strategy to kick-start growth was “go hard or go home”.
It worked and the business expanded rapidly and successfully.
But by 2014, Fritzsch’s staff of 18 began to feel unwieldy, and the 230sqm of office space her business occupied was a major expense.
At the same time, the once-booming WA economy was slowing down and the accounting sphere was being disrupted by new technology and cheap outsourced services.
Her clients were looking for faster, cheaper and easier ways to get their accounting and taxes in order.
Fritzsch decided to downsize and reposition her business to cater for changing demand from clients feeling the pinch too.
“Clients were trying to save money,” she says. “I thought, if we can offer them training to save them accounting and book keeping fees, I will.”
Instead of trying to cling to old roles, Integra pivoted to offer small businesses the training they needed to use new accounting software to do their own books.
“You need to see the new technology as an opportunity – not look around and think, ‘I’m obsolete’,” she says.
“We’re trying to show them how to save money without reducing the quality of their books. As well as moving into training, Fritzsch shifted the focus of the firm’s accounting staff from compliance to a more pro-active advisory role, offering quarterly reviews and guidance to SME clients.
“You’ve got to change the way you do things and change what you’re offering,” she says of the shift.
“You need to innovate or die in this fast-moving climate.”
The final step for Fritzsch in rebooting her business was downsizing both staff and office space.
“If you’ve got less work coming in, but the same amount of people, your profit just erodes,” she says.
Cutting staff is the hardest thing a business owner will ever do. “But if you’re going through hardship, you need to bite the bullet and look at redundancies.”
Despite downsizing, Fritzsch says profits are up and stress is down. Her advice for others:
- Cutting staff: “Work top down. Look at the ones you really can’t do without. That’s easier to evaluate than justifying who’s not doing their job, because everyone has a role.”
- Expenses: “The best things that happened to me recently was someone hacked my work credit card,” laughs Fritzsch. When she cancelled the card, it put a stop to an accumulation of forgotten direct debit payments. “Really go through your expenses – do a bank statement or credit card audit. It was a real eye-opener for me. Individually, it’s not much but all together they can erode your profits horribly.”
- Find a mentor or network: “Find a group or a person you resonate with, otherwise you can feel like you’re stuck on a lonely island.”