A limited company in the throes of an MBO with a newly appointed telemarketer, Dennis & Turnbull director Carl Reader explains the thinking behind the firm
IT’S ALL CHANGE at Dennis & Turnbull, which is currently in the throes of a management buyout with directors Carl Reader and Ben Herbert soon to be at the helm.
A chance turn of events for incumbent director Julian Gillett saw him leave the firm early in the year to pursue other opportunities, leaving Reader and Herbert to step up and captain the D&T ship. “Julian is an out-going charismatic person who helped build the firm and take it to a further stage before Ben and I stepped in,” explains Reader. Gillett had a main client base of martial arts franchises, but Reader wanted to extend that.
The firm, which works as a limited company, was founded in 1991 by Neal Dennis, who continues to work with Reader and Herbert. It was Reader’s ambition, when he started in 2002, to grow the franchise arm established by Gillett as much as possible. “I had a light-bulb moment and knew there was something in the franchise world for us,” he explains.
Reader attended various business events to find out what the market was after. But he ended up taking a gamble and using a cold-calling method to achieve his desired result. “We did a massive mail shot and we ended up with 100 franchises”, he says.
The move paid off because the firm is now one of a handful of franchise experts and it regularly hosts franchise surgery events for owners to speak to the D&T guys for free. Although a mail shot may have seemed like a shot in the dark attempt to grow the firm, Reader suggests it can provide a better return on investment than other forms of growth such as mergers and acquisitions. He has even taken the idea further – to create a role of a part-time telemarketer who cold calls businesses to win clients.
The decision to move in this direction came as the company looked to shift its focus to offering online services. D&T now offers clients a package where they can access and input their accounts online with a central manager overseeing the process for a set fee. “Clients don’t care where you’re based, they care about what you know. If they are looking for a local accountant you can compete with good parking spaces, price and good coffee,” says Reader. “That’s a hard fact of life, that businesses don’t usually want to meet accountants, they want a fixed fee and a response or answer quickly.”
Reader explains that he takes inspiration for the firm from other industries. “Insurance companies for example, they don’t have an engagement letter that comes through the post, it’s all done online. Largely people don’t have to meet anymore,” he says.
He also looked to Amazon to help him respond to the growing use of technology in the accountancy market. There’s an immediacy that people expect in everything online he explains, giving Amazon as an example. “if you order something from Amazon you want it the next day and you want to have updates at every stage.”
The internet has also also encouraged clients to shop around with loyalty not as prevalent as previous generations. “The life expectancy of a client when I started was ten years, now it’s closer to five,” he explains. “People and businesses are more prepared to shop around.”
Under new management
In order to stay competitive, Reader has looked at the firm’s business model and believes the best way forward is to keep it as a limited company. Reader adds that both himself and Herbert do not participate in client facing work and believes the partnership model may not the best way an accountancy firm should be run. “The FedEx MD doesn’t do courier work. Even when there are ten employees, the MD doesn’t do the work,” he says. He adds that businesses managers are obliged to run the business, but in a partnership they are also obliged to win client work, which can be confusing.
“Accountancy firms could also have a skewed age range of partner, younger ones may think the partnership model is stifling and want change across the partnership whereas the older ones may not want change,” adds Reader.
Considering the firm won the British Accountancy Award for Independent Firm of the Year for Wales and South West England in 2013, maybe he is onto something.
Although Reader is not interested in growing the firm through acquisitions, he does point out an awareness of an over-staffing issue at D&T. However, he believes this is the way forward, drawing on yet other business for inspiration. “In a warehouse you obtain the warehouse first and then you buy the stock to put in that warehouse,” he says.
With this ‘warehouse model’ in mind he does not believe over-staffing as “risky” for the firm. Both he and Herbert are investing in the future, and they are also working with a consultant to get staff to “buy into that vision and contribute to it”.
Pic: Carl Reader (furthest right) with other members of Dennis & Turnbull
Dennis & Turnbull in numbers:
UK fee income: £2m
Top 50+50 ranking: 117
UK staff (include partners): 50 (4 directors)
UK offices: 1 (Swindon)
Bluffer’s guide to the firm: The term Turnbull is completely made up. There was never anyone who worked at the firm with that name. Also, when leaving school Carl applied for two accountancy firm jobs he saw in the paper and got both, but confesses being an accountant never suited him.
Carl Reader CV:
2010-present – Director, Dennis & Turnbull
2002-2010 – Various roles Dennis & Turnbull, progressing from AAT to manager, qualifying with ACCA in 2005
1997-2002 – Trainee accountant at CKS (formerly RA Smith & Co) in Essex