In The Media
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Press article Featured in BRW in April 1999
NEW IDEAS GIVE THE CONSULTING WORK A REV-UP
By Tony Thomas
Fiona Margariti, the business development services manager at Moonee Ponds firm, Christopher Tolevsky Partners, gets full pay for working a four-day week, as do the three other staff. Owner Chris Tolevsky, takes Mondays off plus Wednesday mornings, for a 22 hour week.
It has not hurt the business; fees in the past year have jumped from $300,000 to $630,00 and $1 million is the target by September 30. Margariti, says: “On my days off I just relax. When I come back my brain is fresh, not tied down in details.”
The practice infrastructure is light, enabling profit to run at close to 75% of fees before owners salary, compared with the typical 45%.
The firm has no debt and does not use time sheets. Tolevsky has a sales and marketing background dating from his university days, during which he worked at McDonald’s. “It is the best experience any accountant can gain. I came to truly understand how business processes can be systematized so anyone can get the right result – plus the ethos that if you are not serving food you are wiping benches.”
He worked for the marketing-orientated financial group Bongiorno Partners, learning techniques from Tony and Joe Bongiorno, and set up his own practice six years ago.
Tolevsky has adopted the red-day, yellow-day, green-day time-management system. “We didn’t dream this up. Tony (Bongiorno) passed it on after a trip to the US to hear Canadian business coach Dan Sullivan.
“On red days we concentrate on the three most important money-making activities. In my case, they include speeches at seminars, coaching my “A-list” clients and developing new products and systems. Yellow days are buffer-days to tackle administration (the firm has outsourced its routine accounting work to bookkeepers). Green-days are for rejuvenation. We do whatever we like. Our people rotate their days to keep the door open.
On his standard long weekends, he garages his white Nissan 300ZX coupe and switches to his red Ferrari (a 1985 model 328 GTSi). He says: “Public accountants say they will work hard so as to take some personal reward. They don’t realize that they move into a reactive mode with clients, when creativity is exactly what clients want from us.
The Tolevsky Partners office is in a genteel Victorian Terrace in a quiet street. Each room is immaculate and contains fresh fruit and flowers (from a wholesaler client). A television set in the “lounge room” tuned to CNN and stock quotes. Tolevsky had been on the ground floor of the Deloitte building in Moonee Ponds. “I got too much low-margin walk-in trade, and grabbed this terrace at auction last September for $345,000,” he says, “it’s now worth another $100,000.”
“Clients love coming here. It’s not sterile like an office. When clients see our spotless place, they get a perception of how we will do their work. The only paper they see is their own file, not everyone’s clutter. Unfortunately, we will have to move out next year to fit two more people. We may hire people like ex school teachers who know how to communicate and can be trained in consulting. Accountants are too fond of being super technicians.”
The firm used to have $400,000 fees from 400 clients. Two years ago Tolevsky shed almost 350 clients involving $130,000 worth of low-fee compliance work, leaving 56 with good potential and intellectual challenge to the firm. “We had been burning time administering small clients affairs. We suddenly won time to work up worthwhile services to sell to our top 20 clients, and to cultivate our “farm club” of 20 clients with potential for more work 90 days out. By last September, the strategy was still ad hoc, involving moving clients to MYOB and Quickbooks for routine accounting. Tolevsky then went to Lake Taupo (New Zealand) boot camp of Results Accountant Systems and brought back the full kit of products. He followed the RAS templates to the letter, sending clients postcards from Lake Taupo telling them about the great ideas he was discovering for them.
Immediately on his return, he recruited Fiona Margariti and a tax manager, Michelle Soric, 32, to free himself for strategic work. Soric runs the firms outsourced domestic bookkeeping and massages the processed work. The in house software is the basic TaxCat product.
“We can charge for the marketing. A $99 fee for a seminar indicates they will get value from it.” Tolevsky says: Seminars are held in the Alamo Room of the Lone Star Restaurant at Moonee Ponds. So far they have generated 10 clients. Each is now paying $33,000 fees in addition to their previous $5,000-10,000 in compliance fees. “We guarantee refunds or a free months consulting if they didn’t lift their profit by 25% within 12 months. No one’s taken me up on that.” The consulting clients include a plastic surgeon, two optometrists, a computer consultant, a fast food outlet, a plasterer and a restauranteur.
In one exercise, Tolevsky organized an advisory board of an optometrist’s customers. Asked what frustrated them most, they said it was the hassle of having to visit the shop four times a year to collect new contact lenses.
Tolevsky found that the firm had 1500 contact-lens patients but only 150 of them were generating repeat business. The rest were just going to the nearest store. The optometrist was losing $90,000 profit a year through this leakage.
“We helped him put out a newsletter explaining a new system where repeats would be delivered automatically. Every new customer is also given this message. That little twist is delivering the extra profit we guaranteed. Even if only a quarter of the clients take it up, it is $22,500 on the bottom line and $70,000 more in the goodwill value of the business. Any purchaser will find this loyal client base.”
A fast food client with two outlets was finding business slow. He believed his staff were practicing suggestion selling (Would you like a Coke with that?”). Tolevsky said: “Want to bet?” and posed four times as a customer buying pizza slices. Only once was he invited to add something. The owner, merely by re-training his staff, increased sales within a fortnight by $1000 a week and profit by 15-20%. Tolevsky says: “That meant $25,000 more profit a year and $75,000 more in business-sale value.”
Tolevsky says that contrary to the usual view, phone consulting is at the leading edge of business advising because of its leveridge. “After the first meeting or two, we operate with them only by phone in a 45 minute conference call, involving maybe three of their people. We fax them homework first. They enjoy not having to travel to us, and operating to a structured system that can’t be side-tracked.”
Margariti says: “Getting clients to agree to a client advisory board of customers is a piece of cake. The board is part of our $33,000 annual package. A session takes 90 minutes and we give an unedited tape to the client later. Our next weekly conference call tackles the issues and action plans.”
Press article Featured in BRW November 2001
STEP ONE: SACK YOUR CLIENTS
By John Stensholt
Four years ago, The Melbourne practice Christopher Tolevsky Partners had 400 clients and a steady income. Owner Christopher Tolevsky decided that a bold step was required to boost the business. He sacked 320 clients.
The dramatic move has had an equally dramatic results. Revenue has soared, from about $300,000 in 1997-98 to $1.2 million in 2000-01, including a 20% lift in 2000-01. Tolevsky expects the current financial year to bring revenue of $1.5 million.
Tolevsky says that in 1997, most clients involved low-revenue compliance work, which took up too much time. He decided to focus on those that had solid growth potential and were intellectually challenging to work for. Now he has pared the list, he says each client receives “red-carpet treatment”.
The smaller client list helps Tolevsky to limit each staff member’s working week to four days. he is in the office even less; he works a maximum of 20 hours a week. He delegates all hands-on work to his four staff members, including three client managers, eschewing the traditional partner model of accounting firms. This frees him to drum up business by making speeches, attending seminars and workshops, and meeting prospective clients.
Christopher Tolevsky Partners concentrates on business development for its clients. Tolevsky has been determined not to get bogged down by compliance work, particularly since the introduction of the GST on July 1 last year.
The firm concentrates on low-volume, high-profit work. Each of it’s three client-services managers has a specialization: taxation, business development and financial planning. Most clients are signed to a business-development program that costs $20,000-30,000 a year. Clients are told in advance how much Tolevsky’s services will cost and they are billed monthly. Tolevsky says: “Everything in tax has already been done and the marketplace is mature. In business development there are no rules and regulations to what you can do and what you can change”.
The company’s clients are professionals, such as optometrists, dentists and medical practitioners. It markets it’s services to the medical community through direct mail campaigns and seminars. It also asks for, and usually receives at least two referrals each year from existing clients.
In working with clients, Tolevsky’s approach is to look at the business and break down how it works into smaller parts. He then recommends strategies to improving the profitability of each part. These strategies can include team training, marketing and advertising, and customer service. On average, clients stay on the business-development program for about two years.
Tolevsky says his main aim is to help business owners make more money by giving them the strategies for building their business. “We ask them where they want to be in 5 or 10 years. We help them create a business that can work without them having to be there”.
Tolevsky has adopted the strategy for his own firm. Although the office is staffed five days a week, not every staff member is there every day. The firm has adopted a “red-day, yellow-day, green-day” time-management system. Red days are for money-making activities, such as client service and developing new products and systems. Yellow days are for dealing with administrative work and green days are for “rejuvenation”.
Tolevsky says his clients understand and support the firm’s system of managing its workload. “We had to educate our clients and explain to them that there are certain days that we will not be able to help them, but they have adjusted and have accepted this”.
Most of the contact between Christopher Tolevsky Partners and its clients is over the telephone, including regular conference calls with one or more client managers. Tolevsky says clients appreciate not having to travel to his office to discuss business matters. He also says the economic downturn should ensure that his business thrives. “If businesses are struggling, they need our help even more. We are operating in the best environment we can”.