Regular physical and mental exercise are essential to keep our bodies and minds healthy. By exposing ourselves to physical stressors such the skeletal impact our body sustains every time our feet hit the pavement, we strengthen our bones, stretch our tendons and keep our muscles functioning. Taking this further and exposing our bodies to more intense stressors such as resistance training or raising our metabolic rate through cardiovascular exercise, can reduce our blood pressure, strengthen our skeletal makeup, improve our mood, make us look younger and even lengthen our life. Like the mechanism of a flu vaccination, exposing ourselves to small amounts of physical stress increases our physical capacity and improves our health.

In contrast, if were to permanently cocoon ourselves indoors at optimum temperature, insulating ourselves from danger or injury, our bodies will slowly become weak, our muscles will deteriorate and we become more susceptible to conditions such as brittle bones.  Similarly, to stave off mental decline and maintain a sharp mind we need to continue learning throughout our adult lives. Research developed by Thomas Bak at the University of Edinburgh suggests that learning a new language in later years can stave off dementia.

Taking your team for a ‘workout’

Big companies, small businesses and even departments within organisations act in a very similar way to humans. Businesses are essentially living and breathing clusters of people and just like individuals, they need to be stretched in order to stay healthy and to grow. The obvious metaphor is that, just like a human being, staying still and comfortable leads to atrophy and decline. Of course, we’re not talking simply about sending a firm’s employees to the gym (although it should be noted that workplace wellbeing programmes are indeed thought to increase productivity too). Far and above, one of the most effective ways we can prepare for the future and increase resilience is to invest time and money in training our staff.

If the right management structures are in place, continuous training and education can make our companies supple by encouraging employees to see their roles from new vantage points. Through training and development we can reduce risk by ensuring that employees are not only compliant but are fed new ideas about their industry or marketplace, free of internal biases or collective beliefs held within a firm.

Atrophy, decline and death

Without a commitment to intellectual growth, an organisation can easily become myopic and quickly lose the edge that made them successful in the first place. In mature firms where staff have been in post for 10 years or more, ‘bounded rationality’ eventually begins to creep in. In MBA speak, bounded rationality is a condition where long serving individuals make decisions based largely on their past experience, becoming guarded and closed to new ideas which often results in them missing major opportunities and threats in the marketplace.

I witnessed this first hand during the mid 2000s, when I worked for a large independent record label whose core business was built around selling their artists music on CD. Out of a staff of 500, I was one of two who worked in the ‘Digital’ department (the label struggled with what to call us). At one meeting, with a chap who’d been in the business for most of his life, I came away dumbfounded after his refusal to even entertain a discussion about a digital release of one of our artist’s big singles.

By his reckoning, the risks were just too big, the revenue a pittance and well… he’d worked at the company for 20 years and it just wasn’t how they did things. We fought our corner and over the years we battled to sign contracts with music stores like iTunes and revenue began to trickle in. Alas it wasn’t enough and the company was eventually split-up and sold off. In hindsight the decline of the CD was pretty easy to call but at the time the senior managers of the company didn’t want to hear about the changes taking place around them. I was studying at the time – not paid for by the company – and was able to bring the fruits of my academic research to my work.

In the evening I was reading about the slow decline of physical media and during the day I got the opportunity to witness it first-hand. But alas, I was powerless to stop the decline. For the most part my advice was ignored, and it certainly didn’t make me popular. I eventually went to work for one of the digital services that was cannibalising the business. I say this without any sense of schadenfreude, I loved working for the label, and despite the failures of the senior management, it was a fun place to work. The music business is certainly poorer without them.

Surviving a changing industry

Just like the human body, if companies fail to learn, grow and develop, they gradually wither and die. Blockbuster, HMV, Kodak and Borders went from multinational superstars to failed behemoths in less than ten years. And surely for every famous name there must be a thousand more who quietly fell by the wayside unnoticed by the masses. Conversely former hardware giant IBM has survived for over a century, originally selling tabulating machines, evolving to large scale computer systems and eventually personal computers. In 2002 IBM’s core business changed again when they acquired PWC and the firm eventually sold its PC business to Chinese technology firm Lenovo.

At the time of writing IBM employs over 375,000 staff and their core business lies in providing storage and security solutions – a big departure from their original business model. A thesis could be written on why IBM survived where others failed but a review of their history reveals three key details 1) the foresight to constantly innovate, adapt and respond to change 2) the empowerment of middle and senior managers to “question decision and policies” 3) the investment of large amounts of their revenues in research and training.

Train, adapt, change and win

We can’t predict the future. We don’t know what technologies will stick, when the next recession will hit or which events will change our world but we can condition our businesses like we condition the body and stretch the mind. With wisdom and foresight we can create structures that will respond effectively when the changes come (and change always comes). We need to make sure our staff are not only well trained but that they are trained regularly and crucially that they are empowered enough put their learnings into practice.

Furthermore education shouldn’t take place at just the top or the bottom of an organisation. Dictates from on high may lack the detail needed to put the winning tactics into place whilst employees at the lower rungs of an organisation can rarely initiate change alone. To roll with the punches, organisations need to be constantly learning both from outside and from within.

Finally the push and pull within an organisation – the clash of ideas, the new versus the old – act as the stressors that our body and mind endure when lifting weights or creating new neural pathways when learning a foreign language. Senior managers, directors and CEOs would be wise to genuinely listen to the observations and ideas of junior staff – they often have the most insight within the business. Some companies claim to do this but it can often become little more than a box ticking exercise.

Surrounding oneself solely by people who agree with your vision can quickly lead to a room full of ‘yes men’ and encourage a culture where staff who disagree or offer an alternative vision are seen as a cranks or outsiders.  During the Cuban Missile Crisis, one of the gravest situations in world history, President Kennedy found so many of his staff unequivocally agreeing with him, he employed a ‘devils advocate’ to aggressively disagree with his position in order to open the debate up. Like the physical stressors needed to keep our body and mind healthy, the natural push and pull within organisations – i.e. small amounts of internal conflict – are vital to keep us supple, vibrant and ready to take on the challenges of unavoidable change.

Former AAT President Henry Cooper, is an experienced practice owner and helps run AAT’s Be Your Own Boss workshops. He sat down with us to answer members’ pressing questions about how to get started in practice.

What can you actually do in terms of starting your own business once you’re AAT qualified? – Dan The-Bhakti Man, via Facebook 

That is a good question. I think it’s better to turn that around and tell you what you can’t do. As an AAT accountant, as long as you’re qualified and competent and have some work experience, you can basically do anything that a chartered accountancy practice can do apart from an audit. There are a couple of other regulated activities, such as independent financial advice and insolvency, but otherwise it’s entirely up to you.

How do you appear confident when trying to win your first client when you’re really nervous and you’re unsure about yourself? Phillip Toomer, via Facebook

How do you find out what you need from a new client to get started? – @wynpennant, via Twitter

Research the client as much as possible before you go to see them. It’s a bit like a job interview in that respect. The clients don’t always know what they want, so you often have to tease more information out of them to work out what would be of most value to them. If you are asking clear questions of the client, it puts the ball in their court, and will make you appear confident.

How do you put together a solid business plan, and that you have everything where it needs to be? How do you make sure you grow steadily? – Victoria Harrington-Biddle, via Facebook

It’s important to differentiate here between the business plan, i.e. the facts and figures, and your strategy. It’s important to have both. The strategy needs to have some flexibility built into it when you’re first starting out, because things will often not work out as you expect them to. When I started out, I was expecting to do bookkeeping, but the way things ended up going, I now predominantly do compliance work. It’s all about planning for the long term but being agile as well, so if the situation does change slightly, you can change with it.

Is there a single guide available that talks you through starting a practice step-by-step? – Harry Simons, via Facebook

There are a few things I could suggest there. AAT regularly does Be Your Own Boss sessions, which are held at various locations throughout the year. That goes through everything you need to know, and you leave with a plan for your business. Once you’ve joined the scheme for Members in Practice, AAT provide you with a practice management toolkit, which gives you plenty of guidance as to what you need to do with things like continuity of practice etc. There are also all sorts of discussion forums, Accounting Technician magazine, where you can find more examples of best practice.

Apart from advertising, how do you find and get clients? – Steven Morris, via Facebook

How do you get contacts to help you start-up? – Rosalyn Carrington, via Facebook

Networking is important not just to get clients, but also to find extra support. Working for yourself can be very lonely, so if you’ve got a network of contacts that you can talk to and in some cases exchange business referrals; that can be very useful.

This isn’t an instant fix, however, you need to build up relationships with people, which does take time. Social media fits into this as well – you can find your ideal clients, follow them and build up an interaction there.

You can buy databases of local businesses and send out mail shots or emails, but make sure it’s a checked database, because you need to make sure you’re not breaking data protection laws. I also did a leaflet drop around local businesses, which got me some of my early clients. Things to avoid are things like newspaper advertising and the Yellow Pages, because they can be quite expensive.

Are there any networks of accountancy practices that you can join on which people can search for an accountant in their local area? – Stacey Law, via Facebook

One of the most obvious ones is the members in practice directory, which is on the AAT website and allows people to search by postcode or even type of service. It can be quite cheap to set up your own website these days, and I think it’s important that you do have a website. Make sure you’re on LinkedIn as well, because people can find your company on there.

I’m currently at Level 2 and trying to make the necessary steps to becoming a self-employed practitioner. What kind of experience do you recommend that you should get before starting your own practice? – Wayne Owens, via Facebook

If you’ve worked in some form of accountancy up until then, you’ll have some sort of accountancy knowledge that you can apply, but if you want a much wider range of experience, you could volunteer some time at a charity. Working for a small charity, you may end up doing a wide variety of tasks, which you may not do in a traditional accountancy job. You’ll get a lot of experience of different situations, so you’ll quickly build up a quite varied range of experience.

You could also do some work for friends who need accountancy services. I did that for some friends of mine when I started out, who worked as an electrician and a plumber respectively.