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All right everybody, welcome back to the show.

I am super excited because today as usual, we have another really amazing guest on.

His name is Ian Morgan, and he is with MBS Accountants outta the United Kingdom.

Ian, thanks for joining us today.

How are you?

audioIanMorgan53832276467: Yeah, fantastic.

Thanks Chris, so much for having me on.

And hello everybody who's listening.

audioChrisJolly63832276467: Yeah, absolutely.

My pleasure to have you on.

I know we're gonna have some great conversation today especially because your

business deals with a lot of the stuff that we actually talk about on the show.

So I know you're gonna have some really valuable insights to

share with me and the audience.

Super excited.

And without further ado, why don't you tell everybody who you are and

what you do and how you got started?

Yeah based out obviously in the United Kingdom.

I suppose a little bit about me personally, first of all

is I'm late thirties, 37.

I've got four children and I got married pretty young , I was just 19 and.

getting married and having children pretty young, I think gave me a focus

to just go the employed world that I was in at the time wasn't gonna

be fulfilling enough in terms of the life that I wanted to be able to live

and as we had our first children.

Wife Sam she set up the company and started doing, some basic bookkeeping

and, payroll type services from home cause it nicely worked around children.

And we fast forward a little bit on, and I came in and joined the company having had

a bit of a background then in accounting.

And we became a typical accounting type service for a number of years there, where

we just, we helped file tax returns, help people reduce how much tax they

pay, and then through, through an element really of creating a business that was

quite painful to operate and run with a lot of clients and a lot of stress.

We, we decided one day we'd just take a little bit of a look back and just

go, What journey are we really on?

What are we trying to achieve?

What are, where are we trying to go?

And we started to question whether people really wanted an

accountant to fault tax returns.

And our view was probably not like it's a bonus if that happens.

But actually the reality is that most people who probably

want an accountant is because.

Numbers are maybe scary to them or they don't make sense, or they don't

know how to even put them in an order so they can make sense of them.

So we completely flipped our business on our on its head at that point

and went, okay, how do we stop being a gateway between the business

owner and the government and start being very much working for that

business owner to start giving them?

What they really want.

And we basically built a three step process that we still follow today.

And that's, first of all, when somebody comes and join us, we help them achieve

and gain financial control because most people are just doing enough

relating to their keeping of their books that makes the government happy.

Anything that's gonna give them anything that they can rely upon or get data from.

Doesn't tend to exist.

And then we do two further steps on from there.

One is financial clarity or financial education, and it's just

about us definitely not teaching people to become accountants.

Don't recommend that maybe for everybody.

But it was certainly, it's aimed around how do we make sure that business

owners understand enough about their financial performance to know whether

they are getting good or bad results.

And then step three is understanding what does financial freedom look like for that

particular business owner and what actions and steps are they taking to actually

achieve that version of financial freedom?

And that's just been our pathway now is financial control, then the

financial education and clarity and then through to financial freedom.

And through focusing on that element we've reduced the

number of clients we work with.

But we have much deeper working relationships and we really get probably

under the skin of the actual business owner, we've got a fine balance between

are we coaching them as a person or are we coaching them as a business owner?

And I think it probably goes across both because.

I've been there myself and I've certainly been in my own way.

And the clarity to get to like where am I trying to head towards, really

gave me the clarity to go, ah, okay, these are the steps I need to be taking

today that give me the future that I want to be able to achieve for myself.

And in a nutshell, that wraps up yeah, a good sort of 15

years plus in, in business.

All right.

Excellent.

Yeah.

Let me ask you, because I know here in the US the sort of financial education

most people received growing up is non-existent to absolutely terrible.

Is it any better over there across the pond or it's pretty much the same?

No it's pretty much the same, the schools

are more focused on maths and, I dunno, PYS and whatever else.

Not stuff that's probably gonna be very much useful in the.

The majority of the real world day to day.

So yeah, there is a lack of education around real numbers and

yeah, real tools that can help us.

Yeah, and that definitely translates over into

the business world because if you didn't learn to do your personal finance, You

probably also didn't learn to do business finance, and I know that's something

a lot of entrepreneurs can relate to.

That's something I definitely relate to because I started business in my early

twenties and another one in my early thirties, and I knew how to do the running

of the actual business, but I didn't know anything about the financials.

And so I ran into this place where, with without having a good understanding of

that and what really drives the business forward and keeps money coming in, in

higher cash flow, you reach a plateau.

That's as far as you can go.

And I just look back and think to myself, if somebody had bothered to

sit me down even for two hours and show me just a little bit of this,

or even let me know that I need to go learn it myself, those businesses in my

life would've been totally different.

Yeah, I think.

One of the major challenges that we come across, and one of the first areas we

delve into in financial education is that financial set of accounts that you get

to see has either a pound sign, dollar sign, euro sign, whatever on it, and

our brains straightaway go, oh, money.

But actually, so much of what goes into that set of accounts isn't money.

It's money that could be potentially earned in the future.

If you're doing, accruals based accounting or.

There may be, adjustments for things like amortization and and

depreciation and things that there is no cash that's ever gone anywhere.

And the most common question we used to get and probably still

get elements now, is, yeah, but if that's my profit, where's the money?

And that starts, usually our financial education series is just

to go, okay where's my money gone?

Your money hasn't gone anywhere.

It's just that, that, just because there is a currency

symbol doesn't mean that's money.

It just relates to money.

And now you work mostly with entrepreneurs,

exclusively with entrepreneurs.

Yeah pretty much exclusively with entrepreneurs.

We have a few who have been entrepreneurs and now maybe have

property portfolios and things.

But yeah, 99% of our clients are entrepreneurs of some description.

audioChrisJolly63832276467: And where do you find that they

struggle most with business finance?

I think there's probably the sense of the reality check.

Our job is probably to live up to the stigma of accountants and be

boring, but it's to go business owners, entrepreneurs think that

everything from their wildest dreams is possible, very rarely is it the case.

But it's good to have that dream and have that vision of

where you'd like to be going.

And I think most of the time our job is, how do we bring that back

to a sense of reality to go, yeah, okay, you think you're gonna do,

I dunno, a million pound month.

You're not even doing a million pound last year, so it's not gonna happen.

We can get there, but what's the real logical steps?

How's that really gonna work?

And actually, if you're gonna go from doing, I dunno, a hundred thousand

pounds to a, a million pounds in.

In just a couple of months, the business is gonna break.

Like most businesses cannot cope with that level of growth.

So our job is to often say what other people aren't saying.

We challenge them all the time to every time you have that thought

and you go, oh, can I say that?

That's definitely what you should be saying.

Because for that entrepreneur, most people around them are probably almost in awe of

what they're doing and not saying those, they're not challenging them on those

tough decisions and those tough areas.

So often it's how do we bring them back down to earth and how do we just

then gently bring them back up again?

You mentioned that your wife is your

business partner, but you were telling me a little bit beforehand that you

guys had different ideas at first of how the business should be run.

You wanna touch on that a little bit for us?

Yeah, so it was probably rolling into about

2015, 2016, and we'd got ourselves to three, I think, members of stuff.

And it was very, I was very overworked and underpaid at that

time, and, A great element I suppose, that we have between us.

I'm probably that more of that typical entrepreneur.

I've got lots of ideas, think everything's possible, and we can do whatever we want.

Sam, my wife, she's probably a little bit more than realist.

She's a lot more organized, a lot more structured, and we were butting

heads a little bit in terms of, I wanted all these other things.

Some wanted to bring in all these rules and systems and processes, and what I felt

was gonna happen off the back of that is we were gonna lose the family touch that

I thought we had within the business.

a very easily adjustable business that was all very lighthearted.

There was still an underlying element of professionalism, but it was all

very relaxed and I thought, oh, systems, processes, everything being

organized and documented just sounded.

Restricting and it actually came to the point where she said, okay, if you wanna

do things your way you go and do it.

I'll just step back.

And I was like yeah, I'll fine.

I'll go and I'll do it my way.

It didn't last too long before I was at the point where I'm just going,

ah, that's it, I need to quit.

And she was like, hang on then.

I've let you have your way, you let me have my way for a bit.

And then what we're seven, eight years down the line and we're

still doing things her way.

And it clearly works.

We are now at 13, 14 members of stuff.

It doesn't restrict, if anything, it opened my eyes to how much I was getting

in my own way and having systems and processes meant that, We just needed,

we needed people who really fitted our culture and we could teach them

the skills to be able to operate our systems and processes and deliver

those outcomes off the back of them.

And it just, it made recruitment easier.

It made holding people to account easier, made everything easier, to be honest and.

Everything came off the back of that financial success came off the back of it.

Less stress, less work, and actually so much that as we speak now in what

we're in February, 2023, this is my first month now where I'm not client

facing technician within the business.

I'm purely strategic development of the business, and I think if I'm

really being honest, that wouldn't have happened under my way of doing things.

Seven or eight years ago.

, audioChrisJolly63832276467: it's really

tend to think a lot of entrepreneurs that installing the systems and having

standard operating procedures and all of those things can feel really

restricting and you just you get into an entrepreneur because you want.

Freedom.

And that can seem like not freedom, but actually if you don't put those things

in, you end up chained to the business.

Trying to put out a million fires, running around, trying

to, getting things taken care of.

And then when you do implement those, that's what actually gives

you the freedom and frees you up to, step away a little bit.

Yeah.

Yeah.

Couldn't agree.

Couldn't agree more.

Yeah, it's easy to say.

Much more difficult to do.

As always.

Now, Ian, let me ask you, you told me that you were going to break the myth of

accounting being boring, so let's have it.

Yeah.

I think ultimately what we try and do is we try and make sure that we're not being

those typical, boring, stuffy accountants.

We're a very young team..

I'm the oldest on our team.

So mostly, most accountants I know are probably the wrong age of the

wrong side of retirement age, and we are not standard, sat there

in suits and everybody, yeah, just being all stuffy and boring.

We've got some great characters.

I think our main element that we do to switch accounting from being

boring is we just make it human.

First things first, when people come to us and the first things they

comment on is, yeah, but why are you not interested in my business?

Why are you asking all about me?

And usually our reason is because your business is just a tool that helps you

lead the life that you want to lead.

And unless I understand you and really know where you are going and

what you're trying to achieve, how can we possibly help you get there?

And how can we possibly know if that business is gonna be the

right tool to help you get there?

And we end up just so much based on interaction of who are you,

who's important in your life, what stops you getting to where you

want to be, where you at right now, and where would you love to be?

And if we put all of that together and we understand it all, we can then

really build clear plans that were almost step by step, which numbers

only form a very small part of it.

It just becomes human interaction, human relationships, and just go great.

Most people, it's an element of I only work, wanna work this many hours

and I'd love to earn this much money.

Okay, great.

You can't, the money can't go up and the hours can't go down.

At the same time, how are we gonna strategically think to

go, which is the most important that needs to change right now?

and how do we bring things together?

And I think it just, it goes away from, oh yeah, but that's, that's a couple

of dollars out or that's a couple of pounds out and that's not important.

The important things are what is that business helping you

achieve in, in terms of your life.

audioChrisJolly63832276467: Yeah, absolutely.

If your business is not a vehicle for you getting to financial and time freedom,

then you're probably doing it wrong.

Yeah.

All right.

Now let me ask you, as somebody who deals with business finances all day

long, what is the biggest financial challenge for you and your business?

I think that the biggest financial challenge

for us in our business is actually trying to map out and manage growth

with ensuring the quality levels are there that we want to deliver.

So most people who come and work with us are.

They've had some kind of financial challenge or

difficulty within their business.

Maybe they've been let down by an accountant.

Maybe they're partly responsible as well, and they haven't kept their finger

on the post and in our experience, the training that probably goes on within

the accounting industry is too much focused on what we used to be, which

is how do you complete a tax return?

How do you keep the government from knocking on your door?

And therefore for us to bring in the right quality stuff to be able to teach

to the way, our way of thinking and get them to that level, we have to balance

how many clients are we bringing in and how quickly versus how many clients

is somebody capable of managing.

And therefore we can't just literally go out today and go let's hire

three new accountants and let's train them and get them all set up.

Because realistically from our experience, it's three to six months before we've

got them to a level where they can start earning money back into the business.

And then we can't easily go the other way and go, can we just

bring in loads of new clients?

Because actually we are about, we're not a transaction based business.

We're very much that relationship element and lots of new clients just

starts hitting on the relationships of other people, existing clients,

really within the business.

So that's our financial challenge really, is balancing that just to go.

We've got growth available.

We regularly run a waiting list.

It can take up to six months to join us, and that's because of the

quality that we strive to achieve.

So the big challenge is,

if we could fix onboarding, in terms of how we do that and how we grow new people.

Into our team, and we could fix that.

We could substantially scale our business, but the business model

itself probably isn't a scalable one in that level because of the high

level human relationship that we have.

Yeah and I bet too when you made that switch from

going to just being like tax returns to actually helping people figure

out what they wanna do with their money and why the client retention

probably went up a bunch, didn't it?

Yeah.

It did for the right fit clients.

Overall, it massively nose dived because actually there were, we had a number

of, I don't even think we can call them entrepreneurs, hobby business owners maybe

who suddenly when we up the ante and start going, what are you trying to achieve?

Where are you trying to go?

They're like, Ah, I don't want all this rubbish.

Like just file my tax return.

And we were just like, no that's not what we're about anymore.

We can see a bigger picture.

So we went, today we sit probably at 150 ish businesses that we work with

at our peak in about 20 15, 20 16.

That was about 600.

Okay.

So there was a period of time where the retention

overall would've looked absolutely awful.

But the retention on the right type of clients, yeah that's constantly going up.

And I wanna say on average at the moment, it's about seven and a half years, I

think is our lifetime value of a clan.

audioChrisJolly63832276467: That's amazing.

Now let me ask you about your own journey to financial freedom.

Where are you on that journey right now, and what does being

financially free mean to you?

Yeah.

2015, we made our shift to what we wanted to be by.

Late 2018, we bought the property we currently live in, which we

considered to be our, forever home.

And there were a few things that we needed to sort with it.

It was definitely a stretch in order to afford it, but we could see a

pathway that we were on and how that could become significantly better.

The level of work that the properties required has been substantially

more than we anticipated.

As

I would say a couple of things that

we've had to do to finish off.

Basically we built a large extension and post swimming pool in over the summer

last year, and they ended up costing more and we had to take some various forms

of short term finance to make that work.

Which is what causes me to go, oh, am I financially free?

No.

Cause I don't like that short term finance that we have.

But as we roll into the new financial year so that for us is rolling into April,

may time, we'll be able to refinance that to something a lot more suitable.

And then we're probably at the point then when we go, actually

no, we are pretty financially free.

We're very comfortable.

There's nothing that we would.

Majorly want for that we can't achieve and can't have.

And I think, yeah, just thinking back, when we first set out on our

journey back in the sort of 2005 three to about 2012, there were

periods of that time where we were.

Multi five figures in debt.

And not owning a property or anything like that, like literally

negative personal equity position.

And that debt was spiraling.

Earnings weren't particularly great and the survival mode that we probably

learned to be in at that time still Ring Street with us today, Yeah, I'm st

I'm, we're very tight with our money.

I don't spend it unnecessarily.

We think about things considerably.

There are some things that maybe some people would look at and go, oh that's

a lot to spend on that particular thing.

But we're very careful about keeping our money for the things

that we particularly value.

in terms of where we're at, I think.

Financially very stable and secure.

Time freedom, not quite there yet.

I've made that shift obviously this month into not being client facing.

I've got about a six or eight week project now in terms of improving our

onboarding processes and department.

over that period of time, I probably work more than I would want to, but as

we roll into sort of April may time, it'll be, it'll become I want it to be

that I choose to work, not that I have to work, and I don't see any reason

currently why that can't be the case.

All right.

And then what is your biggest initiative for the business for 2023?

audioIanMorgan53832276467: Our biggest initiative for

2023 is a platform for growth.

So we did some quite heavy growth during 2022 between 60 and 70%, it was quite

a lot to manage that level of growth.

We actually stopped then taking new clients in about October, of 2022.

we did that strategically because we could start to see some of the

cracks and the creeks appearing.

So 2023 became, okay, how do we make some very tactical and strategic hires?

That mean that we move people into quality control, into having time to

do a lot more training, a lot more improvements, and looking over things.

So one hire has already happened relating to that.

One is currently actively happening and the other one's planned for June.

With all of those hires then in place, we will have built a nice platform that as

we roll into 2024, We should be able to grow by about 40 to 50% in that year and

do that without really any major problems.

Sounds like a great trajectory you're on.

All right.

Now my last question for you today is who does the books for your business?

Yeah.

So we actually do this as a bit of a mix and split.

Sam, my wife, does the books day to day.

To keep her head in the numbers and knowing what's going on.

My job then is effectively as like an FD to report to her.

So I will take her work, do reviews and checks, not because I'm necessarily

checking her just because it makes sense to have that review process

on there, and then effectively my job's to then report to her and say,

this is our financial performance.

This is how we perform versus our budget.

This is how our cash flow's gone versus our cash flow forecast.

And then she's almost holding me accountable for reporting

that information back to her.

So we very much create accountability between us both

in order to make that happen.

Excellent.

Ian this has been an absolutely amazing interview.

I know that a lot of the things you said are gonna really resonate with

our audience, and there's a lot of good tidbits in there for them.

So I want to thank you for taking the time and jumping on the show today.

It's been such a pleasure to have you here.

Yeah.

Thank you so much for having me on.

It's, yeah, it's been great and yeah, it's been nice to share the story.

Now the last thing before we go, if people

wanna find out more about what you do or to get in touch with you,

what's the best place to do that at?

Yep.

So you can find out more about what we do and who we particularly help on our

website, which is mbs accountants.co uk.

And if you wanna connect with me, the best place to find me is on LinkedIn.

I'm sure we can probably drop a link in the show notes.

audioChrisJolly63832276467: Yep, we can definitely do that.

All right, Ian, it's been awesome.

Thanks so much for coming on today, and if you are listening out there and you

enjoyed the show, please go ahead and subscribe and leave a five star review.

And if you're a six figure online entrepreneur and you want to come

on like Ian did today to share your valuable insights with our

listeners, we'd love to have you on,

You can go to p y f podcast.com . That's the

letters P Y F podcast.com, and apply.

audioChrisJolly63832276467: All right, thanks again, Ian.

audioIanMorgan53832276467: Cheers everybody.