It’s very easy to mistake being busy for progress. The firms which successfully grow to be a one million pound practice have cracked the challenge of getting the right people to do the right things. When it comes to getting the right people to do the right things, it starts with you, the firm owner. A great way of doing this is to do an audit of your time using the Red/Black/Blue Model. This blog post looks at how to use the Red/Black/Blue Model to decide on whether you have the correct balance of working on and in the business.
This blog post is an extract from the book 'The Accountants Millionaires' Club: How to build a highly profitable £1 million practice while working fewer hours with less stress'
The Red/Black/Blue Model
To use the Red/Black/Blue model to audit how you spend your time firstly make a note over a 2-week period of exactly what you are doing and how long you are spending on an activity. Then for each activity code it red, black or blue and add up how much time you are spending on each Red/Black/Blue activity.
Red work: This is your non-client facing work (i.e. your back-office stuff) and the stuff that you just have to do (i.e. the cost of being in business, such as your expenses and performance reviews with staff). Very often your management responsibilities fall into this area.
Black work: This is your client-facing work, such as client work, account management and networking.
Blue work: This is your strategic blue sky thinking time. It’s all the things you do to invest in the future for your firm. For example, business planning for your firm or attending a conference to get an insight into the future. Very often your leadership responsibilities fall into here.
Your aim is to increase the time you spend on Blue work, and ditch, delegate or do differently the Black and Red work.
Once you have done the analysis on how you are spending your time, then be honest with yourself and identify what you shouldn’t have been doing, and take action to change it. After all, growing a one million pound practice all starts with you freeing up your 8 hours of time a week.
What needs to change if you are to spend more time working on the business?
Typically small accountancy firm owners are not spending enough time on blue work and spending too much time on red and black work. To readdress this balance:
- Standardise your firm's ways of working and automate any manual tasks wherever possible
- Delegate more of your black work to your team. In particular stop micro-managing your team!
- Stop doing any Red work which doesn't add value or need to be done by law.