How Paul overcame business hardship to start over and grow a family-owned practice from £250k to over £600k in five years.
Paul Donno is the owner and Director of 1 Accounts Online, an award-winning cloud accountancy practice in Haverhill. Heather first met Paul at the British Accountancy Awards in 2016, where he had just won the award for New Practice of the Year after setting up 1 Accounts Online, his new cloud-based firm. A couple of years later, Paul reconnected with Heather as he was having a bit of déjà vu: his firm was £250k and he couldn’t see how to get above £300k. With previous experience guiding him away from a sale or merger, he decided to seek help to get through this ceiling.
In this Growth Story, you’ll discover how Paul has:
- Grown his firm from £250k to over £600k in less than 5 years
- Made critical moves to smash through the £300k revenue point – a point he thought was impossible
- Taken the steps to build a strong leadership team around him so he is no longer the bottleneck
- Built an advisory income stream worth over £100k within two years
- Navigated the ups and downs of running a family-owned business
If you’d like to listen to or watch the conversation, click below for the YouTube video of Paul’s’s chat with Heather.
About Paul
As a Director on the AAT board, Paul is passionate about development and will happily share his experiences with you or offer an ear on a call or over a pint. He’s been there when it comes to the highs and lows of owning a firm. With over 30 years of experience in accountancy, he’s learnt the hard way about growing a successful business. If you spend any time with him, you know that family always comes first (in fact, most of his family work with him at 1 Accounts Online!). After that, it’s the family dogs, playing golf and indulging his love of fast cars.
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Setting up the business
Paul’s story is one of determination and resilience; also of not being afraid to start again. The idea for 1 Accounts Online came about after a merger with his previous practice and another firm went horribly wrong. He came back up swinging, knowing he wanted his new practice to not be seen as stuffy, but as service-driven, innovative and online business specialists.
With a company value to ‘deliver awesome’, the firm gives clients the tools to help business owners streamline their operations and create efficiencies. They are a family business to the core, with daughters Jade and Katie as Director (formerly Practice Manager) and Client Care Manager respectively, and wife Jenni also a Director and in charge of the team’s wellbeing. Jade’s fiance, Josh, recently brought his tax specialism to the practice, and the careers link is titled ‘Join the Family.’’ If you’re a potential or current client, you know immediately that your experience won’t be stuffy or clinical.
As with his previous practice, 1 Accounts Online grew fairly quickly, but in 2018 he found himself in a Groundhog Day moment, struggling to get to the £300k mark. He decided to seek help to get above this ceiling as previous experience taught him a sale or merger was not the right solution.
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Committing to growth
Knowing he wanted to do things differently, he got back in touch with Heather. He couldn’t see how to get 1 Accounts Online above £300k, but was willing to have a go at smashing what turned out to be a perceived ceiling. Fast forward five years and the practice is at nearly £700k in turnover. Now that’s a comeback!
Getting the price right
The first thing Paul looked at with Heather was pricing. 1 Accounts Online had priced their cloud accounting services at a rock bottom price hoping to corner the market… while delivering champagne service. This was not sustainable, with no cash readily available to hire much-needed team members. Everyone was working harder but they couldn’t afford to hire. Raising fees and package prices made a huge impact.
“When I first looked at the cloud offering, I thought price is where it needed to be. We were doing a product at £67 a month that we now sell at £299 a month. That’s a huge change in pricing, and understanding that the market wasn’t price-driven, it’s actually more service driven.”
Who fits where?
With the benefit of hindsight, Paul understands he was doing the wrong job in the beginning. His happy place is where he’s winning new clients and working with clients on interesting projects for their businesses. Not so much in the day-to-day running of the practice, which was holding the practice back. Identifying this led to bringing his daughter Jade into the business initially as the Practice Manager. Between Jade and wife Jenni, Paul is kept in line (and he knows it!). Jade formalised processes and took on Karbon like a boss, which accelerated the firm’s growth and made for a streamlined operation with the team.
Making the cash flow again
As with many businesses at the £200k-300k mark with 4-5 staff members, cash flow was an issue. While this is typical, it can be remedied. Paul worked with his coach to identify where cost savings could be achieved, such as switching out expensive software for better but more reasonably priced options. After spending a weekend looking at the numbers at the time, Paul highlighted £20k in software spending that could be allocated better.
Getting to know clients beyond compliance
Paul enjoys learning and appreciates a challenge. After deepening his knowledge of what it takes to grow a business and how to communicate with clients on the AGC Certified Growth Advisor programme, he decided to build out a business growth offering for clients. This service has become popular enough that Jade has also taken the training and the offering brings in £100k on its own with eight clients.
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Getting through the hard times
We know from the merger that didn’t work out that Paul overcomes adversity with panache and heart, coming back stronger and smarter. Paul is currently working on contingency planning so that the business can carry on without him when he is not able to be fully present. Occasions where this has caught his attention have included:
Family illness - You’ll have gleaned that family is a cornerstone in Paul’s life. There are times when family must come first and this happened when Paul’s father went through a period of ill health.
Building new office premises - Construction is often an underestimated time-absorber f
or business owners. Last year, the business purchased and refurbished larger premises. The new building will be and is already fantastic for their growth, but the building project consumed six months of Paul’s time — and there was an impact on the business.
Losing a big client - One past client became a massive client, with a fantastic monthly fee, but they were at high risk of bankruptcy and were taking up a lot of Paul’s time. The client did eventually go bankrupt. But capacity planning and targeted business development meant that the teams replaced the income with more sustainable clients less than six months afterward.
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Lessons learned: key takeaways from the journey so far
Aside from processes being key to growth (and him not implementing them), lessons that Paul has learned on his journey so far include:
Succession planning - Though he would like to retire to the golf course in a few years, Jade and Katie are not accountants. In order to step back, Paul is keenly aware that the practice will need to have at least one other person at his level of technical expertise to maintain a practicing certificate.
Capacity vs profitability - Paul has found that any time the business makes a big leap forward in growth, the team really needs to focus on service levels. These can dip when things are running ‘hot’ but low on capacity. A corresponding dip in client referrals can develop, which is not a desired effect. And as the team grows, so will the numbers to pay HMRC, wages, VAT, software licences… the list goes on.
Recruitment - The 1 Accounts Online team has been fortunate in their recruitment endeavours but Paul knows this may not always be the case. The business will soon need more team members to deliver the growth service, but the challenge will be to find candidates with the right mindset and understanding of the company ethos. It will come down to fit and that can take time, particularly in a small town in Suffolk.
Know thyself & get support - Paul labels himself his own worst enemy. He knows that regular accountability and support prevent distraction and self-sabotage. A regular conversation and a “kick up the backside from Heather works wonders for keeping my business growing.” Additionally, learning to say ‘no’ — not always easy!
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What’s next?
Challenges seem to change on a regular basis, but as you’ve seen, Paul is up for it and has the support from his team to strategically face the challenges head-on. With his eye on the prize of getting back to the golf course on a more regular basis, Paul plans to continue to take stock, and not let the business run away with itself.
** 1 Accounts Online is an innovative, cloud-based accounting practice in Haverhill. If you want to get in touch with Paul to learn more about his journey and/or to pick his brain, you can contact him here. **
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