Long ago I realised that “Hope is not a strategy”. Even if it worked in the past it would be foolish to assume that we can simply ‘hope’ our way out of the current situation. That goes for me as regards my business activities, for you and your own practice and also for your clients’ businesses.
Have you accepted the new reality yet or are you still ‘hoping’ that things will quickly go back to how they were before COVID-19? If they have achieved anything, the latest Government announcements have confirmed what some of us anticipated would be the case some weeks back. At least that’s how I read it.
If anyone still hopes things will return to normal “when this is all over” they will have a longer wait than anyone of us would want. And longer than is feasible when planning the short-term future for a business or accountancy practice. This won’t all be over until most people, of all ages, consider themselves protected from the virus – either due to having survived exposure to it or after having been vaccinated against it.
I’m no expert but common sense tells me that it will take much more than a few months to create, test, prove, produce and administer a working vaccine to over 50 million people. And that’s why I fear it will be at least a year or more until enough of us are willing and able to attend crowded spaces – be they offices, shops, gyms, pubs, restaurants, cinemas, theatres, sporting or cultural events. This will probably have more of a direct impact on your clients than on your practice.
The question that follows though is what will be the impact on your practice if many of your clients suffer falling profits, losses and reduced prospects? I know firms that had modelled this in April and anticipated anything from a 20-50% fall in fee income over the coming year. I suspect that’s looking optimistic now.
Clearly I hope I’m wrong. But equally I cannot afford to allow my business activities and focus to rely on that hope. Can you? I would stress that it’s important to plan by reference to facts rather than by reference to fear.
Equally I know many. many smaller firms of accountants who have resisted making long term plans. They’ve managed quite well (sometimes) in the absence of detailed plans I accept that it will include a dose of hope and of scenario planning. Or you can continue to stumble from day to day, helping clients where you can, and hope that everything will work out for the best.
It’s not all doom and gloom of course. Plenty of accountants are also focusing on the possible opportunities that could be coming. This includes the increased productivity and flexibility that flow from everyone being more used to remote working – all be it this is NOT ideal when it’s forced on us, and not everyone wants to work from home long-term.
Another, more widespread opportunity may follow from the way so many accountants have started to pro-actively offer advice to clients. This could mean you are much better placed and more confident about expanding what were previously compliance focused relationships. Many of your clients will require, benefit and value regular advice from you, be that cashflow, funding or business strategy related.
As I suggested in a previous blog post, at some point you will need to decide just how much free time and advice you can afford to continue giving to clients. You may have already made your choice here. But PLEASE remember, unless you are set up to run as a charity, there will come a time when you will need to be paid for sharing your professional expertise. The longer you do this for free, the more difficult it will be to change things even when the current emergency has subsided. Are you in it for the short-term or the long-term?
I have long been forecasting that within 5-10 years accountants will want to spend more time on delivering advisory work and getting paid for doing this. It will become the new normal approach for accountants because of other changes I do not need to repeat here. When talking about the ‘immediate future’ I stressed the ned to consider which key business skills you will need to have developed to have a sustainable practice when the fees you can charge for compliance work have fallen.
I know many accountants who accepted my arguments over the last year or two but were nevertheless concerned as to how they would manage the transition and how they would develop the necessary skills to promote, pitch, price and provide advisory services.
That transition has now started. Much sooner and for different reasons to those we were anticipating just a few months ago.
Instead of simply hoping things will go back to normal, I’m taking action. What about you?