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Yesterday, businessDEPOT turned 5 years old! Life before bD [businessDEPOT] seems like a lifetime ago. While at the same time, now we are 5 years old I don’t think we can call ourselves a startup anymore.
I still remember at 9am on 2 December 2013 we called everyone within our teams to the then boardroom to let them know we were leaving and introduce them to my new baby, businessDEPOT. We were well organised with a temporary website ready to go live that day, business cards on the way and a well-documented vision and plan for what was around the corner. Although we were organised, you cannot help that feeling of nervousness when you launch a new business - how will the market and the team react?
At the time we were somewhat ‘out there’ with our name, our approach and our message.
5 years on, there are things we would do differently and things we have learnt along the way. Some things went our way and some things didn’t but, this year, a year when I have already been investing time and energy into thinking about what is next for the professional services industry, it intrigued me to look at what has changed in the last 5 years at more of a macro level for the professional services industry.
These are the top things I think have changed that may or may not have changed our strategy 5 years ago.
Our main focus when we were setting up the technology 5 years ago was mobility, and to have one single point of truth. All the advice we received at the time suggested the technology was not quite reliable enough to deliver exactly what we wanted. We were starting with around 24 people so it wasn’t like we could 100% embrace the cloud and hope that it would grow with us - we also had to bring across a heap of client data from legacy systems.
We backed the Xero ecosystem when [to be completely honest] it probably wasn’t quite perfect. Xero Tax was only available for individuals and XPM I think had only just been launched from Workflow Max. But, we could see where Xero was going and some of those duplicated systems and processes were just a work around to get us to where we are now. We invested in the vision and philosophy of Xero as much as we invested in the applications.
Given the legacy systems we inherited, we did have to launch with a remote server. On this we stored Sharepoint [as a document management system], MYOB AE and MYOB Accounting [for both past client data and those not on Xero - of which there were a lot], Microsoft Exchange, and a few other applications.
We wanted to go completely with Office 365 at the time but nobody could give us confidence it would be sufficient for us. Fast forward 5 years, there is almost no need for a remote server, except to store historical MYOB data and some specialist applications which haven’t made it to the cloud yet. We are embracing Office 365, Sharepoint online and the full suite of Xero products including, XPM, Tax, Ledgers and Workpapers.
Looking back, would I have done anything different with the benefit of hindsight? Probably not. I think we made the right call backing Xero but the only system that we have struggled with a bit was Sharepoint although we are staying with it but using the cloud version going forward.
Deloitte’s Digital Disruption Map was first published in 2012. We knew about it well before launching but, in all honestly didn’t really know what it meant for us. With a ‘short fuse and big bang’ all we did know was that professional services needed change.
Source: Deloitte “Building the Lucky Country - Digital disruption Short fuse, big bang?”
Tied in with some of my comments above around technology, there has undoubtedly been a big shift in the digitalisation of professional services.
The impact of this though is something that I think is rarely spoken about, what I refer to as ‘ industry fragmentation’.
The big are getting bigger - and the number of small boutique operators is growing exponentially. The way I see it, the competitive advantage of the big guys is exactly that, they are big. Sometimes they just need a big 4 signature on their financial report or IM - brand trust.
The competitive advantage for the boutique firms is often a very niche specialist offering and/or dealing with the principal on a one-on-one basis. Trust is the commodity again being exchanged - relationship trust though more so than brand trust.
I am curious about the space in the middle. What happens when the small boutique cannot deliver on all of the services a client needs? What happens when the big guys push the boundaries of value and the client just wants someone to lean on without a big price tag?
In the last 5 years I believe the fragmentation of professional services has become more and more prevalent. It wasn’t something I was aware of when we launched businessDEPOT but, looking forward, I think this is a massive opportunity.
Our vision was always to taking a broader view of the problems business owners face - taking a multi-disciplinary approach was therefore essential. 5 years ago, we launched what was clearly an accounting business with some industry and skill specialisation. Wrapped around the accounting business we started forming a collaborative community of referral partners that we ‘know, like and trust’ to solve all the problems we couldn’t solve ourselves - we called it the ‘Collective’.
People were not use to such structured referral arrangements and were consistently looking for the ‘catch’. There wasn’t one - we just took the time to invest in our referral relationships so we had the best of the best available and ready for our clients to lean on.
In the beginning we did cop some criticism for the multidisciplinary approach - how can you not have a conflict of interest? We dealt with this through open and transparent communication and providing more than one option when referring work to others. It was our clients though that kept asking us to do more and more for them.
These days, I don’t think I have ever been more confident with the multidisciplinary strategy but how we communicate will continue to be important into the future as we grow the services we offer.
When we launched, the language around entrepreneurism in the market had still not set in. Malcolm Turnbull was not yet Prime Minister and his innovation agenda was yet to be pushed. State and local governments also were yet to back business as much as they have now.
There are now a multitude of grants available for business and multiple precincts supported by all levels of governments across Australia.
Coworking too was a new concept. Although our coworking space is tiny in the whole scheme of things, we wouldn’t have it any other way. What started as a way to justify taking a bigger office space has turned into something that contributes to the overall culture and energy of the place.
Startups too are now much more prevalent and although we were quick to get involved with them, the bigger firms held back because [I assume] they didn’t see it as a good return on investment in the short-term. That’s changed, and now everyone wants a piece of the action.
5 years ago we could never have guessed how much the spirit of entrepreneurism could grow - we were lucky to have already positioned ourselves in that space before it had even become popular.
When we launched 5 years ago we made sure our website was ‘different’. We never wanted a traditional site that looked like everyone else’s. But to stay ahead of the curve costs time, money and energy. We have had 2 and a half websites over the 5 years and are just about to start our next one which will be a major revamp.
When we launched, we used events to create brand awareness, provide value to our clients and for lead generation. There were hardly any events in Brisbane at the time that targeted the business owner stories, insights and expertise in the way we did it [more than just technical seminars]. 5 years on and the competition in this space is intense. Government backed and other professional services organisations are now onboard with events - so once again, we need to continually evolve our event and marketing strategy to stay ahead of the curve.
Content marketing and social media were still relatively new concepts for the professional services industry in 2013. The idea of sharing our insights for free was foreign to many and this social media thing, many did not think it would catch on for business. But, for us, it was a way to get traction in the market really quick. We embraced social media and pushed into Twitter, Facebook, LinkedIN and Instagram in a big way to build our brand quickly and share our personality.
These days, if you are not on social media and do not have a content marketing strategy, you almost don’t exist.
The expectations of new firms are high - they need to come out with a bang - but the tools and support available are also much easier to access.
5 years ago, only some had started to embrace offshoring. In the last 5 years though it has really taken off. With so much going on at businessDEPOT when we launched we simply did not have the headspace or capacity to take a more aggressive offshoring focus.
My view on offshoring though is evolving too. I think offshoring is a great way to build variable capacity in your business and to enable you to focus on more strategies at the same time. My preference however remains to digitalise or automate a process rather than offshore an old process. The inroads the industry has made on automation though I think is still only the tip of the iceberg and I am excited by the opportunities around the corner.
One of my concerns with offshoring is that I believe in the last couple of years there has been a limited supply of good client managers in the market. I blame a lot of this on the big increase in offshored junior roles 4-5 years earlier. Leaders within the professional services industry need to change the way change they bring through their managers and take this into account.
In hindsight, do I wish we had embraced offshoring more? I’d have to say yes, but I’m also not critical of us because you cannot do everything.
I remember at 2017 Xerocon [the year we proudly won Xero Australian Accounting Firm of the Year] and again this year there was a real theme around the ‘human’ element of business. With one of our values ‘keep it real’ we have always focused on empowering team members to be the best version of themselves.
We made the decision to invest in the EQ of our people very early on in the life of businessDEPOT. It started with just helping the team with their own self-awareness and to understand why others in the team may be behaving the way they are. I now understand how important this was for building trust but I didn’t realise how much more we needed to do.
5 years ago EQ v IQ was barely a discussion in the industry.
Now, I think it is essential to get the best out of your team - especially as we see the workforce becoming more and more transient.
I would love to hear your thoughts on the above and what you see as the biggest changes to the professional services industries over the last 5 years. Feel free to comment online or reach out direct on twitter at @jak_knight or by email firstname.lastname@example.org or give us a call on 07 3193 3000 or 0438 687751.
A few thank you’s too if you don't mind …
It has undoubtedly been a big 5 years for us! We couldn’t have done it without the help of a lot of people.
Thank you first and foremost to our team - businessDEPOT is as much about creating a great environment for you as it is for our clients.
Thank you to all of our clients, from those that came across when we first setup to the new clients that have joined us since - thank you for trusting in us to help you make your vision a reality.
Thank you to all of my fellow businessDEPOT Accounting adn Advisory directors Bradley Conn, Joe Scuderi, Craig Harrison, Megan Kelly, and Jacob Aldridge for believing in the idea and concept of businessDEPOT and embracing it with such gusto.
Thanks to Michael Garrone one of our fellow co-founders who will forever be an important part of our history even though he has chosen now to pursue a new path.
Thank you also to my fellow directors at businessDEPOT Legal Cameron Hancock and Robert Shepley, businessDEPOT Marketing Tyson Cobb and businessDEPOT Agency Broking Alan Dawson - your trust in me and our brand has pushed businessDEPOT as a whole to a new level.
A special thank you to Trent Innes, Andrew Hirst, Sam Purcell and the entire team at Xerofor making it possible for businesses like our the accounting part of our business to exist. Being awarded ‘2017 Australian Accounting Firm of the Year’ was great validation and encouragement to push on with our hair brain ideas.
To everyone else who has referred us clients, mentioned our name or passed on our details, we greatly appreciated your ongoing support and the trust you have in us to look after your valued referrals.
Last, and by no means least, thank you to all of our wives, husbands, partners, kids and wider families for understanding that the time we put into businessDEPOT is as much for them as it is for anyone else.
In the last 5 years we've done some pretty cool stuff ... I can't wait to see what other cool stuff we can do together.
PS: It's the people that make a workplace great! Everyone in the team is important but I couldn't fit everyone into the photo collage.