8 tips if you are considering an accountancy franchise

This isn’t intended to be complete treatise on the subject. I have simply jotted down a few thoughts in preparation for a magazine interview. If my contributions appear online I will provide a link in due course. The journalist seems to be undertaking extensive research so it should be a good piece – but probably won’t be published before the summer.

By way of background: There seem to be more accountancy franchise options and opportunities around today than ever before. Some rely on online marketing of a brand name, some provide exclusive areas and some are better known than others. You don’t need to be a start-up practice to join a franchise as many of them will allow you to migrate an existing practice into the franchise.

Here are 8 tips if you are considering an accountancy franchise.

1 – What is your objective? Many accountants will find it easier to focus on building a successful practice as a franchisee than to do so alone. Different skills are required to build a business then to be a good accountant. Can you do both? Do you want to do both? A good franchisor will probably enable you to build a successful practice faster than if you were to try to do so alone.

2 – Be realistic: Taking a franchise will rarely absolve you of the need to generate clients and, especially, to close the sale with prospective clients. If you need training in how to do this, where will you get it? Or would you be better off with a franchise that generates clients through focused and proven online marketing and conversion? Is marketing support available and do existing franchisees share what works and what doesn’t, perhaps through an online forum, at regular conferences, meetings or elsewhere?  You will especially want to check whether the franchisor has a record of meeting it’s promises re lead generation?

3 – Funding: Some franchises have arrangements with banks to fund the upfront fees – and this may enable you to build your practice more effectively than if you go it alone. Do be careful though to assess the validity of the new business projections and how often these have been fulfilled by other franchisees. And research how financially stable is the franchisor business itself.

4 – Compare and contrast: The various accountancy franchises may have some similarities but they are all different. Different in terms of how they promote the business name, the freedom they give franchisees, the level of fees payable, the length of the franchisee agreement, the level of handholding and support, ownership of clients and so on. Identify the issues that seem important to you and balance up the differences before deciding on your preferred approach. Do you need a big National support operation or would you be comfortable with something more personal?

5 – Legal advice: You may be tempted to sign up without taking independent legal advice. Don’t, unless you are the sort of person who would buy a house without having it professionally surveyed.  How balanced is the contract? How watertight is it? How easy is it to get out if the franchisor doesn’t deliver; not just within the first few months but a couple of years down the line?

6- The founder(s): How involved and committed are they? Are they your sort of people and can they deliver on their promises? Is what they offer more than just a catchy franchise name?

7 – Testimonials: Talk to YOUR choice of a selection of existing franchisees. Find out what has gone well for them, what hasn’t been as good as they had hoped and whether they would have joined up originally knowing then what they know now. You will especially want to know how many franchisees have opened up and how many have closed or left the franchise? And over what period?

8 – Goals: Will joining an established franchise enable you to achieve your goals re building an accountancy practice? Do you want to build something independent and to be your own boss? Will the franchise allow you to do this, help you to do this or restrict your ability to do this?

What other tips do you think would be helpful? 

Like this post? You can now obtain my ebook containing insights, short-cuts, tips and advice for accountants who have already or are about to startup a new practice. You can buy the book or download a summary for free here>>>

 

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Why Cameron was right about accountants

I returned from a few days away to see a storm brewing about something disparaging that David Cameron has said about accountants.

The offending headline in the Daily Telegraph on 7 May was: “We’re not just a bunch of accountants”. This was an extract from an article attributed to David Cameron in the paper. He said much the same thing recently during an interview with the BBC’s Nick Robinson.

Michael Izza, CEO of the ICAEW, writing on his blog, describes the PM’s comments as:  “uninformed and ill judged”. On this occasion, I think Michael’s comments could be self-referential.

If, instead of focusing on the headline, we consider the full quote we can see that the PM did not take a gratuitous swipe at the accountancy profession.  He said:

“People want to know that we’re not just a bunch of accountants trying to turn round the British Economy as if it were a failing economy, but that we are resolutely on their side as we do this work.”

It’s clear to me that the PM simply used the word ‘accountants’ as a short-hand for for a specific sub-set of our profession. That is the Corporate Recovery and Insolvency Practitioners. And I think he’s right to want to emphasise that the Government is not focused only on that type of specialist accountancy related activity.

The PM and Chancellor have made other negative comments recently in the context of clever accountants cooking up tax schemes. But on this occasion I suggest that those accountants who felt insulted by what they read or heard this week can calm down.

Perhaps any accountants who took offence should  think whether they could do more to avoid anyone jumping to the conclusion that references to accountants are intended to be negative slurs. The more we all do to show that accountants do not fit the old stereotypes the better.

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6 key factors that can determine your success

I recently watched an old video clip of the professional services firm guru, David Maister, in which he highlights the six most scarce resources in most professional service firms:

  • Energy
  • Excitement
  • Enthusiasm
  • Determination
  • Passion
  • Ambition

David also points out that his research has proved that the top achieving firms are those that energise, excite and enthuse their people to perform at a higher level than their competitors.  I can echo this based on my own experience and observations over the years.

Those who’ve worked with me will also know that the listed resources are all qualities that I possess in abundance. I have no doubt that they helped me reach the top of my career more so than any technical skills or technical knowledge that I developed over the years.

Would your colleagues and clients use all or indeed any of these words to describe you or your firm? If there’s a mismatch as between how others see you and how you want to be seen you will need to do something to close the perception gap. If you do nothing then nothing will change.

What other factors do you think can determine your success?

Like this post? You can now obtain my ebook containing loads of valuable insights, short-cuts, tips and advice for accountants who want to STANDOUT and speed up their success. You can buy the book or download a summary for free here>>>

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Event tip: Where are you from?

I was one of the hosts at a recent business event and had invited a number of guests. As is the norm all received name badges that also had their company name on them.

Well, almost.

Those guests who had a single permanent role with one firm or company had that business name beneath their name on the badges.

I had sat down with a colleague before the event to help her decide what business name to put on the badges for those where it was less than clear. The reasons for the lack of clarity were due to certain guests having multiple roles, consultancies and/or business activity. In each case they had accepted the invitation by email but had not confirmed the business name that should appear on their badge.  We plundered my memory and checked Linkedin. In many cases it just wasn’t obvious.

In almost every case this was a missed opportunity as all names also appeared on the guest list either with no business name or perhaps simply that of their personal services company or the smaller of the companies with which they are associated. And this despite my best efforts to help our guests gain maximum exposure and benefit from their attendance.

My tip then is to ensure you always make clear what business name you would like used on guest badges and guest lists when you are invited to events.

PS: I have written a 10,000+ word book specifically for accountants who want to Network more effectively. Click here for full details>>>

If you would like to book me to speak on the subject at your in-house conference or training session, do get in touch. There’s an outline of my talk on ‘How to ensure your networking activity is successful’ here>>>

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5 tips for job hunters

1 – Register on LinkedIn and complete your profile so that you are attractive to prospective recruiters and anyone looking there for someone like you. Here’s a link to a short series of blogs I wrote recently on the value of LinkedIn. Once registered you can then use LinkedIn to connect with past colleagues and business contacts. In due course you can then seek their advice and help to find your next role.

2 – Cut your CV down to 2 pages. Remember the key point is that a CV is not about getting a job. It’s about getting an interview. It needs to describe you as a person, not simply what you’ve achieved at work. And 2 pages is all it needs to be.  In practice you will also want to tailor it to each role you go for.

3 – Think about your friends and other people you know who could introduce you to the sort of new employer you’d like to work with. Then talk to your friends etc and ask their advice about how to secure intros to those people. Have a clear story as to what value you would be to a new employer.  By the way, the more specific you can be as to the type of business you are looking to work with, the more you increase the chance of someone being able to effect a suitable introduction.

4 – Depending on the type of role you are considering going for  you might find networking to be a worthwhile activity.  Important to recognise that networking is best done when you are not desperate, and are in position to ‘give’, help and share more than you seek to ‘take’ or gain until people get to know, like and trust you.   I’ve written quite a bit about networking (on and offline) on my blog.

The above list is adapted from an email I sent to a friend of a friend recently after he sought my advice re his new job hunt. He’s an FD and looking to move into a more entrepreneurial environment. 

 

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Are you assertive or aggressive?

I was recently asked my views on the benefits of being assertive rather than aggressive in getting a tax job and in your tax career.  Here’s what I said as is published in Taxation 2 magazine:

While we are used to seeing aggressive characters getting their way on the screen and maybe even in the office it’s not a good way to act during an interview. And it’s unlikely to be a successful tactic when negotiating a  pay rise or dealing with clients – even the most difficult ones.

I have long remembered the rationale for being assertive. It means you recognise that although the other person may have rights, so do you. When you act aggressively you deny the other person their rights.  And when you act submissively or non-assertively, you deny your own rights. If this is your default position then you would probably benefit from some assertiveness training. It’s hard to respect non-assertive interviewees or professional advisers.

Of course, this is easier said than done. Many of us have worked for an aggressive boss who we think revels in his ability to bully us. This may force us into a non-assertive stance. it will rarely enable us to get the best outcome.

I would add that many people confuse being assertive and being aggressive.  To reiterate the distinction above:

When you are assertive you recognise that you are entitled to information, clarification or a reply but that your entitlement is no greater (or less) than the other person’s entitlement to respect, politeness and honesty.

You are being submissive, passive or non-assertive if you remain silent when you ought to ask for help or explain your needs. This behaviour communicates a sense of inferiority. Typically it involves you thinking or acting as if others’ rights and needs are more important than your own. When you do this, other people may not be able to help you because you act as if there’s no problem. This approach will rarely serve you well in interviews, in the office or with clients. Much better that you should feel comfortable, and know that you have the right to ask for assistance or clarification when needed.

Many people confuse assertive behaviour with aggressive behaviour.  The latter typically comes across as bullying or disrespectful, implying that “my needs, wants, and rights come first.” When someone is acting in an aggressive manner, he or she doesn’t ask for assistance, but demands it.

Assertiveness is a skill. It’s not natural for everyone and can take practice to strike the right balance so that you do not come across as aggressive.  Being naturally assertive is a skill worth developing.

Like this post? You can now obtain my ebook containing loads of valuable insights, short-cuts, tips and advice for accountants who want to STANDOUT and speed up their success. You can buy the book or download a summary for free here>>>

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Confidence is good – but not if it’s naive or deceitful

Years ago when I joined a new firm I remember an audit partner telling me about two tax managers in his team.  He preferred ‘Dana’ because she always knew the answers. He didn’t like ‘Sarah’ as much because she was less sure of the answers to questions he posed and often wanted to check with a tax partner.

I expressed the view that ‘Sarah’ was probably the better tax adviser as she was more cautious. ‘Dana’ was probably more dangerous as it was likely that she was overstating her real knowledge if she never needed to seek a second opinion.  I suggested that she was either naive or being deceitful. I suspected the latter. No decent tax adviser ever knows all the answers  – even after researching them alone. It’s  a sad consequence of our overly complex tax system that all too often we cannot give absolute advice as to tax consequences or accurately predict HMRC’s reaction to transactions.

The audit partner understood what I was saying and started to adopt a more open minded approach to the two tax managers. Within a few months he realised that ‘Dana’ had indeed been offering definitive advice that would come back to bite him and the firm at a  future date. He also had another colleague check back and offer a second opinion on earlier advice provided by Dana. As I had suspected Dana’s advice was often quite flaky and could have caused all sorts of problems in the future.   The partner started to rely more on Sarah and encouraged her to develop her approach so that it was more commercial.

The fact is that audit partners and general practitioners generally want their staff to be constructive and commercial. Being cautious is good upto a point but ultimately it is the partner who makes the decisions. If you are always overly cautious you may be seen to be uncommercial. So you need to develop confidence in your own knowledge and ability but this should not come from bravado.

It is generally the partners or the business owner who should decide on the level of risk they want to take when it comes to advising clients. Give them the information so that they can make such decisions.

Equally you should never present unresearched technical advice as if it were gospel. So, even if you have to advise in a hurry, qualify your advice if it is unchecked. At worst you will be given more time to research things. At best the person who runs the practice or the department can decide whether further research is required. Failure to do this may be naive and dangerous for the practice; The other possibilities are that you are a genius or are being deceitful which will rarely help your career ambitions in the long run.

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Finding, Minding, Binding, Grinding

It’s been a while since I referenced the key roles we tend to adopt in our firms. There are four essential such roles. Most firms need partners and team members with skills in each of these 4 areas.

  • Finders – who go out and find the new work
  • Minders – who look after the relationship with the clients
  • Binders – who keep the team working well together
  • Grinders – who do the work

It seems to me that most accountants focus on enhancing their technical knowledge and skills. Update courses tend to address such areas. Of course this is important. The focus though is simply on helping us to be effective or more effective in the ‘grinding’ role. What about all the others?

Sole practitioners will typically be good Grinders and Minders. If they have some staff they may need to be Binders too.

Those accountants who are looking to grow their practice need good ‘finding’ skills – perhaps in addition to the others.

What do you think about this analysis?

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Graduates are too expensive as accountancy trainees

Last week Personnel Today reported that PwC is launching a new graduate assessment route with less reliance on degrees. In effect this is PwC stating that they will cease to be seeking only those with top degrees. About time too in my view.

Some years back when I was a partner at BDO I offered a cost-cutting suggestion that was roundly dismissed by the then powers that be. I had noted how much time and money was devoted to graduate recruitment. The aim then was to persuade top graduates to choose a career with BDO rather than one with the Big 5 or 6 firms (as they then were). This exercise was costly and often disappointing as applicants frequently chose to accept offers from the bigger firms over the offers they received from BDO.

I was conscious that many of the partners in the firm had only ever worked for BDO (Stoy Hayward as it then was).  It seemed to me that the graduate recruitment process was predicated on the idea that the best recruits would continue to want or could be persuaded to stay at the firm post qualification. And that all future partners would thus be home grown.

I offered the view that, “these days” the best people often chose to switch firms after they qualified. Those in smaller firms often wanted the experience of working for larger firms. Those in the (now) Big 4 want the experience of working for smaller but still ‘large’ firms. I also noted that as the firm grew so would it’s need to recruit expert partners who had trained and worked in other firms.

I suggested that we should focus our time and money on seeking to attract the best qualified accountants rather than the ‘best’ trainees.  This would reduce graduate recruitment costs and would free up resources to recruit potential partners of the future only after they had qualified.

But for the recession and the consequent reduction in job opportunities for newly qualified accountants I am sure that the pressure to move post qualification would be just as strong now as it was 12 years ago.

I applaud PwC’s move to widen its net although I sense from their press comment that the change is not as big as it seems. But it is a sign of the times.

I predict that the profession will reduce its intake of graduates into trainee positions in the coming years. Increased automation means that many compliance related services will no longer appeal to graduates (if they ever did). And audit work is largely drying up at the smaller end of the market. Most importantly, firms looking to reduce their costs will not want to engage new graduates to perform ever more basic tasks. These will increasingly be performed by non-graduates. In effect graduates will become too expensive to be accountancy trainees in the conventional sense.

What do you think?

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10 key actions you need to take when starting an accountancy firm

These are not the only ten things you need to do, but they may be the most productive:

1 – Draft a business plan

What do you want to achieve in revenues within a year, 2 years, five years? What will you need to do to achieve those objectives and what will be the consequences and cost of doing so?  Drafting the plan and incorporating cashflow projections will force you to consider related issues and to plan what actions you will need to take to achieve your objectives. Identify and arrange all relevant business insurances as well. Will you work alone or need admin, secretarial or technical support staff? Will you do everything alone or use a Virtual assistant? Sub-contractors? How  will such decisions impact your cashflow projections?

2 – Clarify your service offerings

Will you be servicing private clients? Unincorporated businesses? Partnerships? Limited companies? Everyone/Anyone? (That’s always a mistake by the way). Will you be compliance led or also offering advice? On what subjects do you have the credibility and experience to provide valuable advice?

3 – Draft a marketing plan

How are you going to secure new clients? Where will you go? What will you do? What will you say? What will you spend?

4 – Distinguish yourself

Avoid being seen as just another accountant. Unless you do this you will probably struggle to pick up work from established businesses and from taxpayers who already have an accountant. Your distinction needs to be real and not a figment of your imagination. And it needs to benefit your target clients.

5 – Consider your pricing and billing strategy

Many new firms start by undercutting the competition. This means they build small practices full of cost conscious clients who will never move onto paying commercial fees. Decide whether to set fixed fees for compliance work, value based fees or the more traditional time based charges. Beyond fee levels determine your payment terms – up front, partial upfront, standing orders or only billing after the work is completed with payment due within 7 days? 14 days? 30 days? And what will you do if your payment terms aren’t met?  Factor such decisions into the cashflow projections in your business plan.

6 – Target a niche

You will secure more clients faster if you are perceived as having a special focus on a specific niche – be that clients in a specific business type (eg: shop owners, hospital consultants or dentists), or those with specific issues (eg: overseas property, divorce, large family, business start-up)

7 – Clarify the competition

Research online, in local newspapers, directories and in high street. Check out what others are doing, saying and claiming. You may find someone else has a similar focus to you. Their credentials and promises will be different to yours. You will need to understand those differences and whether this offers prospective clients a choice or means you should consider an alternative niche.

8 – Establish commercial processes

From client sign-up through to billing and cash collection. From the production of tax returns, accounts and reports and your IT infrastructure. Will you be happy to work in the ‘cloud’ or will you need hosted applications and backup facilities?

9 – Keep uptodate

Sign up for online and relevant technical updates across all the areas of work you will be doing. If you prefer hard copy updates subscribe to relevant magazines too. Consider your CPD obligations and how you will satisfy these. Many accountants (over 2,000) have registered to receive unique weekly practical tax updates written especially for accountants in general practice.

10 – Identify reliable technical support

Your professional body may provide a helpline facility. You may be able to call on ex-colleagues. And of course there’s the Tax Advice Network where you can source specialist tax advice as and when you or your clients have a tax problem, challenge or issue that goes beyond what you’re comfortable dealing with yourself.  Register to receive complimentary weekly practical tax updates written especially for accountants in general practice.

What else do you suggest needs to be done?

I have written a 10,000 word ebook containing insights, short-cuts, tips and advice for accountants who have already or are about to startup a new practice. You can buy the book or download a summary for free here>>>

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