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Q&A: Dains’ CEO Richard McNeilly on Olympian-inspired growth and strategic acquisitions.

Dains is making significant strides as it approaches its 100th anniversary. Recently, the firm has embarked on a series of strategic acquisitions and expansions that highlight its commitment to growth and innovation. With private equity backing from Horizon Capital, Dains has successfully integrated multiple firms, enhanced its service offerings, and solidified its market position.

Author

Richard McNeilly

Date

July 4th, 2024

The journey began five years ago when Dains' partner group, inspired by a talk from former Olympic athlete Derek Redmond, decided to push the firm towards greater resilience and capability.

Redmond’s story of assembling a team to reach the Olympics resonated deeply with the partners, leading them to adopt the motto "be the best you can be." This ethos drove the decision to grow the firm through acquisitions, ensuring a strong, diverse client base and a comprehensive range of services.

Accountancy Age sat down with Richard McNeilly, Chief Executive Officer of Dains to hear more about the firm’s remarkable growth strategy and why it has become an M&A expert in recent years.

“We determined that our future...was actually to become larger, more resilient, and more capable,” he said.

Getting acquisitions right

One of the cornerstones of Dains' recent success has been its meticulous approach to cultural integration during acquisitions. McNeilly emphasised the importance of cultural fit in ensuring successful integrations.

“Finding the right cultural fit is just so important,” he said, highlighting the extensive process they employ to evaluate potential acquisitions. This involves 30 plus meetings, a strategy designed to thoroughly understand and align the cultures of both firms involved.

In the past five years, Dains has embarked on a significant growth journey, moving from a Midlands-based firm to a national player. This transformation was catalysed by a decision made by the partner group to pursue growth beyond the traditional boundaries.

"We determined that our future...was actually to become larger, more resilient, and more capable," McNeilly explained. This vision has driven Dains to pursue acquisitions that not only expand their footprint but also enhance their service offerings and client base.

Key to this strategy is ensuring that new teams align with Dains' core values and operational ethos, known internally as the "Dains Way." This approach emphasizes client care, a diagnostic approach to service delivery, and consistent, process-driven execution.

"The Dains Way is all about the way that we interact with clients," McNeilly said, underscoring the importance of maintaining high standards and a unified approach across the firm.

For example, the recent acquisition of Condies Chartered Accountants not only strengthened Dains' presence in Scotland but also brought in complementary expertise in the GP sector.

Similarly, acquiring CRS VAT expanded their services in the public sector, particularly within local authorities and the NHS. These acquisitions were strategically chosen to fit seamlessly into Dains' existing structure, enhancing both capacity and capability.

Expanding Horizons: Diversification for Client Benefit

Dains has strategically diversified its service offerings over the years, benefiting clients with a broader and more robust range of services. This diversification is not random but a calculated effort to build resilience and enhance the firm's value proposition.

"The whole ethos of what we're trying to do is to build the most coherent firm of professional services advisors in the UK," said McNeilly.

One significant aspect of this strategy has been the focus on acquisitions that complement and enhance existing services. For instance, the acquisition of CRS VAT has strengthened Dains' capabilities in VAT and employment tax services within the public sector, particularly benefiting local authorities and NHS clients. This move has been part of a broader effort to build strength and depth in critical service areas.

Moreover, the firm's rebranding and the launch of the "Dains Way" have been central to this diversification. The "Dains Way" involves a diagnostic approach to client service, ensuring that the right team is deployed based on current needs and future plans. This method fosters a dynamic and proactive service model, which has been well-received by clients.

"We invest in discovery meetings with clients to understand what their definition of success is right now," McNeilly explained, highlighting the firm's commitment to tailored and responsive client care.

Dains' ability to adapt and expand its services has also been bolstered by its private equity partnership with Horizon Capital. This partnership has provided the financial backing and strategic insight necessary for Dains to pursue and integrate new acquisitions effectively. The collaboration has enabled Dains to enhance its service offerings continuously, meeting the evolving needs of its diverse client base.

Private equity is not the ‘big bad wolf’

The partnership with Horizon Capital has been a game-changer for Dains, providing the financial backing and strategic insight needed to fuel its growth. According McNeilly, the private equity investment has brought much-needed confidence and resources to execute their ambitious plans.

“The most important thing that we’ve had from private equity is the confidence to complete transactions,” McNeilly noted.

Horizon Capital has not only provided financial clout but also valuable guidance on integrating businesses successfully. This has enabled Dains to maintain its rigorous approach to cultural fit and operational integration, ensuring that new acquisitions enhance rather than dilute the firm’s strengths.

“Horizon has been a brilliant partner…helped us to understand how you truly integrate businesses successfully,” McNeilly emphasised.

The investment has also accelerated Dains’ internal development, allowing for significant advancements in operational excellence, technology, compliance, risk management, and business development.

Embracing Innovation: Technology at Dains

Dains has made significant strides in leveraging technology to streamline its operations and enhance client services. The firm's ongoing digitization efforts are aimed at ensuring all clients have access to real-time digital information.

“We gravitate to a position where all of our clients then have a quarterly check-in,” said McNeilly, emphasising the importance of accurate, real-time data in providing effective advisory services.

The firm’s technology strategy includes the use of advanced workflows and regular check-ins to improve service delivery. Dains has also embraced automation to handle routine tasks, allowing their team to focus on providing higher-value advisory services. This approach not only enhances operational efficiency but also positions the firm to better meet the evolving needs of its clients.

Dains' proactive stance on technology adoption has also involved close collaboration with tech providers. While acknowledging that different providers progress at varied paces, McNeilly pointed out that those who keep up with industry demands and listen to their stakeholders will ultimately succeed.

This partnership with tech providers ensures that Dains remains at the forefront of technological innovation in the accountancy sector.

Walking the Talk: Leveraging Experience for Client Growth

Dains’ own experience of rapid growth and acquisition has significantly influenced the way it advises clients on their growth strategies. By applying the lessons learned from their expansion journey, Dains offers clients a unique perspective on scaling businesses effectively.

McNeilly highlighted how the firm’s hands-on experience in navigating acquisitions and integrations provides valuable insights for clients aiming to grow. “We’re not just talking the talk, we’re walking the walk,” he said, underscoring the practical knowledge they bring to client engagements.

One of the core elements of Dains' advisory approach is the emphasis on strategic planning and cultural fit, both of which have been critical to Dains' own success. By sharing their methodology, such as rigorous cultural evaluations and strategic planning processes, Dains helps clients to understand the importance of these factors in successful growth and integration. This approach ensures that clients are well-prepared for the challenges and opportunities that come with scaling their businesses.

In addition to strategic planning, Dains advises clients on leveraging technology and operational efficiency to drive growth. Drawing from their own digital transformation journey, Dains provides clients with practical advice on integrating technology to enhance service delivery and streamline operations. This not only helps clients to improve their operational efficiency but also positions them to better serve their own customers.

Building a Strong Team: Talent Acquisition and Retention Strategies

Dains has implemented several initiatives to attract and retain top talent in the accounting field, which are crucial to the firm's overall success. McNeilly emphasised the importance of integrity and clear career paths in their strategy.

“We deal with everyone with integrity...to help people be the best they can be, not just start a career,” McNeilly stated, underscoring the firm’s commitment to supporting employees’ professional growth.

One of the key strategies is providing a structured and supportive environment for new trainees. Despite trends towards remote work, Dains believes in the importance of in-office training and supervision.

"The first thing that we do for our trainees is we commit that we will supervise them...they will be looked after," McNeilly explained, highlighting the firm’s dedication to comprehensive training.

Dains also offers diverse career opportunities within the group, allowing employees to explore various specializations and roles. This flexibility is further enhanced by Dains’ unique offerings, such as the Isosceles Finance function, which provides exposure to different aspects of the accounting profession.

Moreover, Dains places a strong emphasis on work-life balance, recognising its importance in maintaining employee satisfaction and productivity. While the firm acknowledges the challenges of achieving this balance, it strives to provide the right tools and support to ensure that employees can succeed both professionally and personally.

Looking Ahead: Anticipating Future Trends and Challenges

The Dains Group will turn 100 in 2026 and the firm is keenly focused on future growth drivers and market trends. McNeilly identifies the recruitment and retention of top talent as the most significant challenge facing the firm.

“The way that you build a brilliant business, undoubtedly, is you build it with great people,” McNeilly stated, emphasising the critical role of talent in sustaining growth.

In addition to talent acquisition, Dains is preparing to meet the evolving needs of its clients through continued innovation and service diversification. The firm anticipates that technology will play an increasingly important role in its operations and client service delivery. By staying ahead of technological advancements and integrating new tools, Dains aims to enhance its efficiency and offer cutting-edge solutions to its clients.

Market trends indicate a growing demand for advisory and value-driven services, moving beyond traditional accounting functions. Dains is well-positioned to capitalize on this trend, leveraging its comprehensive service offerings and industry expertise to meet client needs. The firm's proactive approach to understanding and responding to market changes ensures that it remains competitive and relevant in a dynamic business environment.

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