I have had the opportunity to visit and work with many court reporting firms, both in the United States and Canada, over the past few years. There are a number of common tendencies that seem to appear on an ongoing basis with the owners of these firms. Keep in mind, that the vast majority are, or have been court reporters themselves for some period of time. Most of the time, they have either started the firm from scratch or purchased an existing firm from the previous owner or owners.
The court reporting industry has undergone major changes, both on a macro basis and a micro basis over the last 10-15 years. Keep in mind, this is from an outside perspective. I’m not writing this as a former court reporter or former firm owner, only from the vantage point as an outside observer and advisor.
These are the top 3 issues that I encounter when working with court reporting firm owners:
- Attitude & Approach - Owners approaching their court reporting business from an employee mentality or a reporter’s mentality and trying to manage a business from that perspective. The responsibilities of an individual court reporter differ greatly from the responsibilities of a firm owner, which I have previously written about numerous times. When a court reporter becomes a firm owner, many times they try to do anything and everything they can to support the court reporter and make sure the other court reporters are happy and comfortable with what the owner or owners are trying to accomplish. They also want to make sure the production staff are happy and trying to support them, in any way possible. Owners want to ensure that everyone is in agreement and on board with what the ownership is doing. In short, the owners want to make sure everyone is happy and, usually, they are the only ones not happy. This dynamic seems to be present far too often and is usually detrimental to the organization. The reporters are an extremely valuable asset, as are production people, depending on levels of oversight and appropriate expectations being created. If any company, in any industry, allows the employees to drive the boat, it can be problematic for the owners at some point. It is very difficult, for an owner to manage around what each individual wants or needs. In the absence of a consistent system and protocol, everyone will create their own expectations and protocols. An owner is left trying to put out all the fires that these individuals have created, with valuable clients and relationships. (For more on taking ownership and more control of your firm, read our Transitioning from Court Reporting to Firm Ownership Guide.)
- Wanting more clients and business & doing nothing to make that happen – Almost every owner that I encounter, is wanting more business, clients and revenue for their firm. It’s a reasonable request for any owner, however, once we drill down, that same owner is usually doing very little or nothing to generate that additional business or create new opportunities. Most of the time, they are trying to do what they did 10-20 years ago with baking cookies and serving pizza or providing free lunches from time to time. Guess what? It’s not working in the current business environment. You can create opportunity or you can wait for opportunity! Promoting your business has many different facets to it. Most of the time, owners are doing a couple of different things without an overall idea or plan of what they should be doing and what components should be included on a daily, weekly or monthly basis to give themselves the best chance of creating opportunities for their firms. If doing what you did twenty years ago isn’t working, you may want to look at doing something different, or many things different. (For more on improving your marketing and increasing your business, read Marketing Fundamentals for Court Reporting Firm Owners.)
- Not understanding the financial statements and how valuable they can be – Court reporting firms are businesses, and as such, the financial statements are important. Understanding how to use those statements and that financial information is also very important for an owner. Unfortunately, too many owners I interact with assume their CPA is taking care of that aspect and they only worry about them during tax season. That is a huge mistake! If you don’t use your financial metrics as a tool, you are giving away a valuable asset in managing a small business. Most of the time, I am explaining what variable and fixed expenses are and how they differ or what they should be to an owner, who hasn’t worried about them for years or didn’t know what they were in the first place. This is much more common than you might think. I think the myth that small business owners are very good at business and understanding their businesses is a common assumption and it couldn’t be further from the truth and reality of owning a small business.
These are the top 3 issues that can impact many court reporting firm owners. If not addressed, you will continue to wonder how you will compete with large national contracting firms doing billions of dollars per year in revenue. The industry is going through a consolidation period now and many of you will not survive it, doing things the way you are currently operating. It is difficult to compete with firms that are owned and managed by business people, while approaching your firm’s business with a non-business approach. Change your attitude and educate yourself and, most of the time, this will produce better results for you and your firms.
If you would like to have a conversation with us about how you can start addressing any of these issues, request a consultation.
ABOUT THE AUTHOR:
Terry McGill is a small business consultant and managing partner of Strategic Business Directs. Connect with him on LinkedIn.