'Hurst welcomes Sarah Perrin.' The message was prominently displayed on a conference-style notice-board standing in the reception of accountancy firm Hurst's Stockport head office. A small touch, but one symbolic of the attention to detail, and quality, that has helped generate yearly average growth of 25% over the last seven years.
Senior partner Malcolm Hurst founded the firm in 1982, after seven years with Price Waterhouse. Today he has 10 fellow partners and 44 staff based in Stockport, Liverpool and Manchester. Hurst's annual fees have grown from £1m in 1996 to an expected £3.5m for the calendar year 2001, and the company was poised just outside the top 60 in Accountancy's annual fee rankings published last July. The firm actually came equal 16th in the consultancy fee rankings, level with significantly larger firms Morison Stoneham and Price Bailey.People first
'If I'm describing the firm to a potential client, then my focus would be on the quality of the people who are here, our specialisms, our approach and attitude to business,' says Hurst. Such claims are frequently made by professional services organisations, but they sound credible when applied to Hurst. For example, the firm clearly invests in staff quality, winning Investors In People accreditation in 1994. 'We're a people business,' stresses Hurst. 'We have staff appraisals twice a year, personal training plans, and so on. We're a well-organised, highly structured people organisation.'
In terms of the firm's general approach to business, quality is again a high priority. In 1993 Hurst became the first accounting firm in the North West to achieve the ISO 9000 quality standard. 'We were very much a pioneer in ISO 9000,' says Hurst. 'We made a big investment in it, principally in time, but also in cash. We restructured the way we organised our business to make it more effective. The maxim of quality is about getting it right first time, all the time, every time - to cut out rectification. We now get audited twice a year to make sure we're up to spec.'
IT and systems support the firm's approach to business. 'We've invested heavily in IT - in new tools and practice management systems - over this past year,' says Hurst. 'If you contrasted this firm with others of a similar size, you would probably find many other firms wouldn't have the investment in systems, in people management and customer care, that we do.' Systems are seen as a vital enabler of growth: 'We grew from nothing to £1m turnover before we got into serious systems,' says Hurst. 'Then, with systems, we grew from £1m to £3m.'Self-promotion works
This growth has been assisted by pro-active marketing activity. 'My natural inclination is to be marketing-oriented,' says Hurst. 'That's how I was able to start this business and grow it. It also goes back to systemisation - getting people to do things who are experts in the field. Craig Jenney [marketing manager] is a very important person in the organisation. He's involved in our strategy and positioning in the marketplace.'
The company has a clear idea of the types of client it wants to work with. 'We are really interested in ambitious privately-owned companies - SMEs, owner-managed businesses, people who want to make a change, to grow, buy or sell a business,' says Hurst. Although referral remains the main source of new clients, Hurst uses an inhouse telemarketing specialist who contacts appropriate businesses to see whether they might need any of the firm's services.
Hurst's interest in marketing activities stems from his student days when he completed his business degree. 'It was a sandwich course sponsored by Massey Ferguson in my home town of Coventry,' he explains. 'Marketing was the function I focused on in the programme. But then there was a crash in the tractor market and when I came back to Massey Ferguson [after a period back at college] I found the marketing people had been sacked but the accountants were still there. My new role then was as a cost and management accountant.'
Hurst considered gaining some accounting qualifications, and chose the ACA route. 'I wanted to be in a position where I could work anywhere,' he explains. 'I didn't want to have to work in industry, and so I took a 50% pay cut and went to work for Price Waterhouse. I was attracted by the transferability of the qualification.'Beating the odds
Building up the firm to its current size hasn't been without its challenges. Hurst's original mission was to offer a similar range and quality of services to private businesses as the big firms provided to plcs, though at far less cost. His first office was positioned above a shop in Cheadle Hulme, Cheshire, where Hurst employed one qualified assistant and a secretary. Clients started to sign up and fees gradually built up. The firm survived the early 1980s recession and grew through the late 80s boom until it was generating £1m in fees. Then Hurst decided to open a second office, in Sale.
Then the early 1990s recession struck. Clients cut back their discretionary spend on advisory services, which already accounted for a major part of the firm's fee income. Hurst reacted by offering specialist services in profit-related pay, an initiative newly launched by the then government. The firm developed specialist software and skills and marketed the PRP concept to private businesses, with the promotional idea that they could potentially save up to 7% of their payroll costs. The tactic paid off and, despite the tough economic climate, Hurst managed to maintain fee levels at around the £1m mark.
The early 1990s saw a key period of development as the firm invested in its ISO 9000 and IIP credentials. Then the partners took two key strategic decisions. They decided first to focus all activity in a single purpose-built office, and second to add key specialisms to the firm's portfolio of advisory services. As a result, in May 1996, the partners and staff moved into the current purpose-built premises in Stockport. Soon afterwards, a specialist tax partner and a specialist corporate finance partner joined the firm, from Price Waterhouse and Coopers & Lybrand respectively. The result was new and significant fee generation. Such advisory services now generate around 62% of the firm's fees, with compliance activity contributing 38%.
Colin Abrahams is the tax partner who joined from PW. 'I was attracted by being able to join a firm in a take-off, growth period,' he says. 'The service is really no different from what you get with the Big Five; it's just a different marketplace. What Malcolm engendered in the firm was a focus on being entrepreneurial; we are business people and sales people. We are seen as aggressive in the marketplace, but that's just because we're ambitious and we want to win clients.'Open-minded
Getting to know clients and understanding their needs is an important aspect of the firm's marketing activity. The first client survey was conducted in the mid-1990s. 'We found out a lot of things,' says Hurst. 'We learnt a lot about ourselves as perceived by other people. We restructured the firm and did the survey again a year later. The change was remarkable.'
In the summer of 1998 the firm restructured again, forming four divisions under the Hurst banner: Hurst Chartered Accountants, Hurst Business Solutions (offering strategic planning, profit improvement, IT, marketing, recruitment advice and support), Hurst Corporate Finance and Hurst Payroll (offering a complete outsourced payroll solution). This structure has remained largely intact, except that in September 2000 corporate finance was rebranded as Hurst Corporate Transactions, incorporating specialist tax services. The reorganisation was successful and the firm continued to grow. In November 1998 Hurst opened an office in central Liverpool, transferring to an office three times the size just two years later. The firm's Manchester office was opened last autumn.
Hurst is a man open to ideas for growing his firm. For example, he has drawn on the insights of Results Accountants' Systems, known for their so-called boot camps designed to help small but ambitious firms develop their service offerings. 'It's an impressive package for accountants who want guidance on different ways of doing things,' Hurst says of the Results offering. 'We learnt a lot and adopted many of the ideas in one form or another.'
Other useful information has followed from the firm's membership of the Association of British Independent Accounting Firms (ABIAF), of which Hurst is a founding director. 'We have had huge benefit from that association,' he says. 'It's non-competitive; it's about mutual self-help. You participate in the inter-firm comparison of financials, for example, and you can speak to people about where you could do better.'
The company also belongs to the Association of Profit Advisers, an organisation designed for professionals who, as the name says, want to help clients boost their profits. As a member firm, Hurst has access to specially developed software and systems for identifying profit improvement strategies appropriate to particular business situations.
In order to offer its clients access to international services, Hurst has joined the International Group of Accounting Firms (IGAF). 'There are some great firms in IGAF,' says Hurst. 'We are one of the smaller firms in the UK, but one of the sparkiest.' He is chairman of the UK division and the firm plays an active role in the organisation.
'In November 1999 we hosted an international tax and corporate finance conference in Manchester. People came from North America and continental Europe.'
Although Hurst is an ambitious firm, the atmosphere is relaxed and there is plenty of humour mixed in with the serious talk. In earlier days the top floor of the Stockport office was used as a games room. 'We had a pool table, table football and a PC football game,' says Hurst. 'We used the room for networking and held pub theme evenings with bankers, lawyers and other professionals. It was a good networking opportunity.' Unfortunately, half this space has had to be given over to offices to cope with the firm's expansion, and the pub theme evenings are a thing of the past.Food for thought
One newer, major Stockport asset remains, however. Since January 1997, Hurst's wife Gill has provided onsite catering, preparing delicious food for entertaining clients (and visiting journalists). 'We had lots of lunches when we launched the corporate finance division,' chuckles Hurst. 'We must have eaten up the output of the entire North Atlantic salmon fleet.' Since further expansion is inevitable, you can bet there is plenty more lunching ahead. But, as Hurst says, 'it's all healthy stuff'.