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New business

6th Nov 2013
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So things are starting to get busier as we head towards the Christmas break and Tax Return season.  We have been fairly good at getting work in and getting it done this year and January shouldn't be that much busier than a normal month.

I spend my time within the practice between mainly final accounts and tax work and meetings with existing clients.  I then also do all the meeting and greeting of new clients which can take up some time.  We normally do fairly well with gaining new business.  We average around 5 enquiries a month with usually 3-4 coming from advertising and 1-2 coming from referrals from existing or past clients.  We gain almost all referals and around 2/3 of the enquiries from our advertising revenues.  We do a good job of filtering out the majority of time wasters just looking to get their current accountant down on fees but the odd few slip through.

This last 6 weeks has been very busy with new enquiries.  We had 11 throughout October and have had 4 so far in November.  The average fee has been on its way up too.  This could be that since we moved into offices last February we have started to target and gain the larger businesses.  In the past we have only tended to gain new start-ups with average fees around £450.  When you take into account the number of small sole-trader jobs this entails we were fairly happy.  However with the split now being 5 out of the 11 clients being established businesses this has pushed the average fee to around £900 we can't complain.

With the purchase of another practice falling through in May we have re-considered where we are heading and made sure our advertising is more targeted and it really is starting to pay off.  We were buying around £120k in fees and since everything fell through we have gained £16k in new clients.  When we take into account new client data of the last few years we should replace those lost fees in another 4-5 years so considering the settling of finance etc we are not that far outside of what we could have achieved in simply buying.

We have learned so much from the deal falling through and had put so much in place to be able to take on the large amount of new clients and work that we have created more capacity anyway so hopefully this good growth can continue. 

Maybe if each practice could look out how they are working and how they would the deal with a massive surge in workload tomorrow then we could all fin either some capacity for more work, or more time to service existing clients or simply more time for ourselves?

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Man of Kent
By Kent accountant
06th Nov 2013 21:37

Going well

Glad to hear things are going so well Morgani.

Having controlled growth and where you are able to meet new clients at the outset will help you to retain a good working knowledge and control of the practice and its clients, even if you don't deal with the detailed work all the time.

Where are you based? I'm interested because your average fees look fairly low compared to the client's I've been taking on. 

Most of my new clients this year (28) have been limited companies with a few straight forward tax returns and the average fee is £1,330, lowest £150 and highest £3,195.

My clients all come from referrals at the moment and are a mix of established businesses and new starts. 

I'm really focusing on ways of working more efficiently - planning work better, utilising cloud bookkeeping and outsourcing work where appropriate.

Better planning means that I can do less 'plate spinning' and get jobs in and out quicker.

I'm also trying to make sure I charge for extras - I've been guilty of not always doing this in the past.

Keep up the good work - I think you'll get to that 'lost' £120k fee income far quicker than you think. 

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By morgani
07th Nov 2013 10:37

Thanks KA

I am based in Gloucestershire.  Judging from speaking with local practices around our size average fees tend to be around the £750 mark.  The practice we were buying had average fees around £500.

We have been gaining a lot of new start up sole traders at around the £240 mark which tends to drag that average down.  Lately though there have been far more established businesses with fees around the £1500 - £2k mark.

We have fairly efficient processes and monitor recovery rates and these tend to average around £100 per hour on accounts and tax work.  Our aim is to be around the £75 mark and we tend to be above this most months and certainly have been since July.

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