PREPARING FOR THE MILENNIAL TIDAL WAVE
Written on the 26 November 2015 by Nick Nichols
KEVIN Nicol is not your typical entrepreneur. For a start he heads an accounting firm, working in a profession that has been built on an image of conservatism.
However, for Nicol (pictured), the CEO of Gold Coast based Quill Group, dramatic changes in the world of business have demanded a strategy that keeps pace.
Part of the change has been driven by an overarching imperative to engage with the emerging tide of millennial entrepreneurs.
"We have to understand that the millennial market is coming at us very quickly," says Nicol.
"By 2025, 57 per cent of our clients will be millennials and if we are not strategic in our thinking now we won't be relevant to a very big portion of the market coming forward."
The attitude among business owners towards this rising demographic is changing across the board, says Nicol.
"Five years ago I would say everyone was pretty negative about Gen Y, particularly from the older generation. But now I am hearing it more and more that we should get out of our own way. We have to make way for these young people.
"While it took me 30 years to get here (in business), they will do it in 10 or 15 years."
It is this pace of change that has driven Nicol to build Quill Group into one of the Gold Coast's top-four accounting firms. It currently has a staff of 66, mostly working from a new consolidated headquarters in the heart of Southport. Five years ago, there were just 22.
When he started in 1997, Nicol had just moved from Brisbane with six clients and $30,000 in fees. Eighteen months later Brisbane financial planner Peter Kirk merged his business into Quill Group to cope with growth. Kirk is now managing director of the group.
Quill has grown both organically and through merger and acquisition in recent years, a move that Nicol says is essential to create the scale needed to resist the temptation of offshoring.
The biggest growth has come from self-managed super funds, with Quill currently managing the books for more than 1000 funds Australia wide. This figure alone places it among the country's top 22 firms with 500 super funds or more under their belt.
Through innovation and technology, Nicol says Quill has also proved that offshoring is not as inevitable to achieve growth as some companies may believe.
"Five years ago we were losing money on every super fund we did, and I understood that we needed to get to scale in order to be efficient," says Nicol.
"So we looked around for best of breed software, something that's scalable. I also invested in quality team members to build that business.
"Five years ago one accountant could look after maybe 80 to 100 super funds, whereas using the technology it is now scalable to between 300 to 350 super funds per accountant. That's done by using technology.
"The whole argument of offshoring to Manilla or India, or Third World countries, to pay $6 an hour for staff is questionable because in Australia we can go head to head and be relevant using technology and innovation."
Quill's growth phase began in earnest four years ago, when it acquired Sims Crawford Elliott and Co, a 90-year-old practice based in South Brisbane. The acquisition was aimed at creating critical mass in the SMFS sector as the Brisbane firm had a workbook of 200 self-managed super funds.
In 2013, Quill merged with Munro Accountants on the Gold Coast, bringing on board the expertise of the Munro team.
The accounting practice has tripled revenue in that time and the financial planning practice has doubled. While this growth has been driven in part by efficiencies created through technology, Nicol continues to search for what he calls Utopia of customer relationship management (CRM) software.
"That's what we're all looking for the 'holy grail'. Today to be relevant you need to use technology, but more importantly than that you need to be client centric."
Quill, which has two Microsoft-certified experts running its IT systems and a SharePoint developer project managing its own cloud-based technology, is working towards Utopia and hopes to have it running before Christmas.
"There is (third-party) software out there to do this, but for an organisation our size it would cost maybe $150,000 a year just on licensing before we actually build the connectors," says Nicol.
"We have been very big supporters of Xero accounting and we have promoted the whole cloud direction. It provides a more agile and frictionless experience between accountant and client and therefore allows us to be more interactive.
"Utopia is the ability to look down into your different databases and have an overarching CRM to be able to see how best to serve the client. To become more product-centric we need this CRM and no one has developed it yet. We are hopeful we will have it finished by Christmas.
"That's why our main databases in planning, accounting and super are in the cloud because that gives better connectivity and that will give us better visibility.
"Clients expect the left hand to know what the right hand is doing. If a client is talking to someone in accounting, they expect that someone in super fund knows their story. That's the same for ourselves, AMP, Macquarie Bank any of our competitors in the marketplace.
"Automation allows us to leverage up and to do more work with less human time because the reality is you can't get 72 hours out of a 24-hour period. But we can leverage up the technology.
"That's why I come back to offshoring. You don't need to do it.
"Everyone's going to beat a different path, but I'd prefer to save as many Australian jobs as I can.
"There's a difference between outsourcing and offshoring. You can still outsource within Australia to organisations that can help you do certain facets of the job.
"With super funds we have a lot of accountants and financial planners across Australia, up to about 52 now that are outsourcing their work and keeping it in Australia and getting us to do it for them."
Author: Nick Nichols