Darren Shirlaw, co-founder of The BoB Group, combined the best parts of accountancy and fund management to create a new type of business. He thinks all accountants should follow his lead.
Here we speak to him about what the future of accounting looks like and why it’s so important to adapt.
The launch of the social network
Between 2003 and 2006, a lot of social networks launched. That changed the face of society. After 2006, the idea of 3G, 4G, the cloud and all of that started coming in, and that changed business too.
I spoke to 1,200 estate agents at the O2 arena six months ago, and I asked them: how much did you get paid to sell a house ten years ago, and how much do you get paid today? They told me their margins had fallen.
Ten years ago, they used to get 5% on every sale of a house. Now it’s more like 1%. Speaking to one of the largest estate agents in the country, they need to be running at 1.25% margins to break even. They’ve gone through this, and you’ve gone through it as well.
A life-changing referral
It was an accountant friend of mine who referred me for a piece of work that changed my life. It was two ladies running a travel business. They wanted to retire and, being in the travel industry, their ambition was to travel the world for the rest of their lives.
They had an offer on the table for AUS$900,000 (£490,000), making a profit of AUS$300,000. They wanted to know if the price was right, so that’s what I was tasked with finding out.
I explained to these ladies that I thought they could do a lot better than AUS$900,000. So they embarked on this journey with me and we then sold their business nine months later for AUS$11.2m.
I had a deal with them that I’d get 10% of everything over AUS$900,000, so I went back to the accountant and said: “How many more of these have you got?”
Fund management plus accountancy
My first degree was in accounting. Then I did a master’s degree in finance, which took me into the fund management world. All I did was to apply fund management logic to these ladies’ business.
A fund manager is taught to only look at the future. But no fund manager that I know has also done an accountancy degree. So I was able to understand the accounting and look backwards, as well as look at it like a fund manager and look forward. Four years later, we had 60 firms sending us clients. Four years after that, we were in 12 cities around the world.
I want accountants to see business the way I do. You can’t keep doing what you used to do. You can’t justify the same fee for compliance work any more, because so much is done by machines.
But a lot of other sectors are going through the same thing. You’ve got to find the value elsewhere. And I think what I do might be the answer.
For more on the future accountant:
- What future opportunities lie ahead for accountants?
- The future of audit is changing, here’s why…
- Why accountants need project management skills
Darren Shirlaw is an expert in helping businesses achieve long-term growth..