bannerImage.png

Beyond the balance sheet

Why you need quality business advisory services to unlock growth

Kathleen Parker 19/2/2020 6 minute read

Kathleen Parker FCCA explains the risk of focusing on price or brand name when engaging accountants for business advisory services.

Cheap is not always cheerful, nor is big necessarily better!

In terms of business solutions very rarely is there a case of one size fits all, especially when as a business owner you have ambitious plans to grow and scale.

A successful business advisory relationship has to be built on more than the underlying products and services delivered. It should challenge and inform strategic decision making while providing support to overcome the hurdles a scaling business faces.

Need an advisory relationship to help you sustain growth? Get in touch >

Business advisory services meaning?

Business advisory services aim at helping organisations identify strengths, and overcome weaknesses, in order to unlock growth. Advisors tend to be either mentors, business coaches, or accountants, who provide strategic and financial guidance to help business owners develop and implement projects to achieve their forecasts.  

How online accounting software has changed compliance services

Online accounting software has led to a plethora of cheap, and in many cases faceless, solutions. Technology has made the process side of compliance more proficient and easier. As attractive as this sounds, it actually highlights the importance of forming a close relationship with your advisor, hence the need for you to invest in a financial business partner. But why?

Why you’ll need far more than just compliance

It’s not a case of if, but when you’ll need strategic advice. Consider the business lifecycle diagram below known as the Stages Model (a concept originally developed by Shirlaws). At some point in your growth journey you'll hit a brick wall and this is when you’ll need help.

If you're using a firm providing merely compliance services, then that won't suffice for your increasingly sophisticated requirements. Below we look at 2 examples where a trusted relationship and advisory services have a crucial role to play in helping manage growth.

The stages model Shirlaws official version.jpg

Examples of business advisory services

1. How to retain key staff

You may have taken on several employees and your business could be enjoying the fast growth phase. As your staff upskill and develop so your brand will gain traction. Your employees could then be subject to tempting offers from larger competitors trying to poach them with higher wages and generous employee benefits.

You might be growing quickly, but it's unlikely to be financially feasible for you to match such generous propositions at this stage in your journey. What can you do? So many businesses today are entirely reliant on their staff and as the quote goes, "a organisation's employees are its greatest asset".

Your employees after all are likely to drive the customer experience. It's probably their knowledge and skills that will develop your product/service offering. This makes them intrinsic to your growth aspirations. It also presents a major problem, how do you persuade your best people to stay if you can't match the offers of major competitors?

How do you prevent your intellectual property, trade secrets and even customer relationships moving with them into the hands of rival businesses? The answer lies in share schemes, but which one should you choose and how do you go about implementing it? 

2. Raise finance to broaden the product range

In the early days of establishing your business and entering growth, your plans will likely have centred around one product or service (or a small number of them) given your size. With scale, comes greater competition and a change in perspective. You'll recognise the danger to the long term success of the business of turnover and profitability being so dependent on one or a few offerings.

That means it might be time to expand your product or service range. No doubt you and your team will have many brilliant ideas as to how to do this. You might look to achieve this in-house or via the acquisition of another business. The problem is it's likely to require a significant investment whichever strategic route you look to take, think:

  • Time
  • Research and development
  • Additional new employees
  • Training and upskilling staff   
  • Potential new premises
  • Materials or software

Chances are this means raising finance which brings a series of options and challenges. How up to date is your business plan and which finance option is most suitable for your business? How will you go about creating projections in relation to turnover, cash flow and profitability?

How will you demonstrate that the investment will benefit the business and its investors or, service any potential loan? How will your projections stack up in relation to historical trade and growth data?

Wellers - Explainer video

Who will help you at this crucial strategic juncture?

You can perhaps now see why software and compliance alone will not suffice! Attempt to do these things yourself and if you're unsure of what you're doing, you could end up with more issues than when you started. For example, if you selected the wrong employee share scheme then this could have implications for shareholders in your business as well as your share structure. 

You're likely to need a firm who can keep you compliant on one hand while delivering professional solutions and advisory services to facilitate growth on the other. This means a change of mindset. Your relationship with your accountant can't be transactional. Instead, it's an investment in a business partner who will expand their services and advice as your business scales.   

Switching accountants, which firm should you choose?

Customer service is extremely important in accounting and business advice because many of the products and services are very similar in outline nature. That means delivery is the unique selling point that differentiates one professional firm from another. For instance, how well informed are you by your accountant as to what is happening in your business from a financial and wider strategic perspective. 

Then look beyond the core service you purchase. Do you receive a regular e-newsletter containing articles covering specific, relevant business issues and developments? Is your professional firm a demonstrable thought leader in your industry? As a growing business looking to expand further, these matters should be rudimentary.

You’re going to need a firm that can not only prepare your accounts and tax returns, but help you understand them to help inform your strategic decision making. You’ll therefore need an advisor, who will draw upon their experience of helping similar clients, to work with you to determine exactly what advice you’ll need at each stage of your growth journey.

This means a bespoke approach to service delivery whereby the offering expands with your ever evolving needs.

Wellers approach to relationships and SME business advisory services

So where do Wellers fit in the market place? Obviously we feel our approach (business oxygen) is well placed to provide you with the high level of service delivery you require - the accounting, tax and business acumen at a price point that works well for growing SMEs.

We offer clients a combination of high level technical knowledge combined with a personal and advisory relationship (akin to a key member of your team) at a price point that represents real value for your money.

Wellers - Scale-up testimonial

How to choose the right firm

The business owners cost driven mindset that all you need is a compliance service to operate within the law with functional systems is understandable. Ultimately however, it can be flawed thinking as this post has demonstrated.

The benefit of using a mid size accountant like Wellers is that our compactness gives us the malleability to change quickly, to adopt new technologies and advancements in the industry.

We've been using a variety of cloud based accountancy packages for some time now and have a wealth of experience in that field. It means our clients can be confident we know which software package is most suitable given your needs and sector.

Ultimately, you just can’t put a price on great customer service and an accountant/advisor that wants your business to succeed as much as you do. Select and invest wisely.

Business advisory services for SMEs to help them grow

This post was created on 22/02/2017 and updated on 19/02/2020.

Please be aware that information provided by this blog is subject to regular legal and regulatory change. We recommend that you do not take any information held within our website or guides (eBooks) as a definitive guide to the law on the relevant matter being discussed. We suggest your course of action should be to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.

 

leave a comment -

Popular posts

What should my management accounts look like?
How to understand the different types of shares & class of shares
Payment on account - what it is & how to pay your tax bill