The accountants’ trap and how to avoid it

Mark
I have always struggled with the answer particularly as I fall into the category of still trying to grow my business after three years!

Thanks for the simple practical tips and keep em coming!

Accountants Hampshire
Hampshire Accountants

Another thing that those offering a professional service need to be aware of is saying something in response to a casual informal question that may come back and 'bite' you financially.

I'm referring to a professional person innocently answering a query at a social gathering and giving an off-the-cuff answer without taking the care he or she would have taken if he or she had been responding to a paid-for query/question in her or his office when with a client.

The bottom line is that saying the wrong thing or giving a quick albeit wrong answer even at a social gathering or in the street to an acquaintance may amount to a negligent mis-statement at common law for which, if the person relies on it and subsequently alter his or her position and then suffers a loss from so doing, you may be sued by that person for the financial losses he or she has suffered.

Lawman, how right you are. I've fallen into just that trap recently - guy I know trying to lose his uk tax status was giving his plans to move to Gibraltar for a while a public airing, and I made the mistake of saying "that doesn't sound quite right...." to some advice he was quoting from his (qualified) accountant.

Trouble is, you're caught between the Devil and the deep blue sea - If you bite as I did, you're laying yourself bare for a vicarious argument with his accountant; and if you don't bite, the very fact that you remained silent when such a fundamental issue is raised, amongst a gathering of other businesspeople to boot, would make you look a burke too. Damned if you do, damned if you don't! It's definitely "no win".

Mark, my stock reply to "How's business?" is always "ticking over", or a variation thereof ("ticking over nicely", "firing on all four cylinders" etc). I find using abstacts handy, because your answer means whatever your listener wants it to mean.

I must try a variation of your line: "Business is great, but we've room for your firm... (... when do you think you'll be joining us?").

If a client has just spent the last half hour telling me his / her woes and how they are not sleeping at night and that they fear that their business is on its knees my response would not be "business is great thanks, but always looking for more" Some clients in that position would not want to hear that. I would answer along the lines that business is challenging for everyone, including us, at the moment and that we have faced up to these challenges by doing X,Y, Z. This shows empathy with the client as well as an opportunity to throw in some valued advice as to how to turn their fortunes around.

If, on the other hand, I was listening to a success story I would answer that business is great, referrals are through the roof and because of this we are expanding and facing the challenges of growth so any further referrals would be appreciated.

Not always as black and white as this, always differing responses to differing personalities and agree with the article that this can be a loaded question and thought should be given to the answer.

Jason Dormer
www.seahorseuk.co.uk

Great answer Jason. I've used this approach myself in the apst and it works on all fronts. The "troubled" client feels re assured that there is a way out and the prospects/ introducres at a netowking meeting also know that there is room for more referrals at your firm.
Of course, you need to demonstrate what you say. It's no ggod saying taht you've room for more business, but then failing to return e mails/ calls etc or cancel meetings and miss deadlines.

Your actions must reflect your words
Stuart Ramsay
www.accountancyextra.co.uk

I work from home without staff so I always have plenty of work to do.

I'd honestly say I'm really busy but if any client needed something quickly I'd put the hours in.

If you come up with a stock reply it's pretty obvious it's insincere.

Yes - good advice but one thing you surely pick up on fairly quickly when you start up. Another thing to be careful of is making appointments - sound too busy and they'll think you've no time for them, sound too available and they'll wonder why, so another careful reply has to be made there.

A lot more tricky area I find is how much information to give when someone asks a techinical question as a potential client - too much and some will try to do it themselves, too little and they'll go elsewhere.

I am really busy (flat out) but am in the process of churning my clients a bit so that I can get my day rate up. i am lucky enough to be regarded as an expert in a hugely buoyant sector (search engine optimisation and marketing) and have grown my client list solely though referral.

So my answer tends to be a highly anodyne "not too bad thanks, am busy enough to get the bills paid and get away now and again, and still have a relatively healthy pipeline of new opportunities" then add something like, "but winning business nowadays is much more about return on investment, than marketing spend, so that's helping quite a lot"

Hopefully this implies that I am in demand, but still have capacity - albeit limited, and valuable.

Richard

http://www.digital-divinity.co.uk

Thanks for this Mark.

Could I, as a new sole practitioner, ask what other new practitioners say when asked "How's business?". Do you say that you're starting up and looking for new clients, or not? Particularly if, like me, you're targeting a specific market only (in my case that's home-based businesses)?

I guess if you admit that you're only just starting up, people will have reservations about your experience, but if you don't let people know you're looking for clients then the struggle to find new ones is even harder!

M

www.homebusinessaccountant.co.uk

My suggestion would be to stop thinking about what's going on in your head and to focus on the prospective client.
YOU know you have the requisite experience (and I know you have too). Does a new client need to know that you've only recently started your own practice? NO. Would it fill them with confidence? Possibly not - unless you had just moved from working in practice for someone else - which you haven't (not directly anyway).

Maybe something like: I'm looking to expand the business/practice and this seems to work best with referrals.
BUT don't do this overtly until and unless the prospect/client has experienced your service - over and above your promises.

Bottom line. Be confident rather than afraid. Clients like confidence. They also want peace of mind - so you'd want to avoid any implication that you're trying to build up a practice that might not work as the consequences for the prospect would be undesirable.

Hope that helps

Mark Lee
Tax Advice Network

Thanks very much for your advice, Mark - much appreciated.

M