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Business plans in practice: Clarand Accountants

17th Jul 2014
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In an earlier article, we spoke to Principa's founder Ric Payne about the benefits business planning and modelling can bring to a firm. Here Claire Priestley explains how the process has worked for her growing practice Clarand Accountants.

Based in Corbridge, Northumberland, Clarand offers tax and accounts services to all types of businesses. The firm's has two partners, Claire Priestley and Claire Yates, and recently took on an apprentice AAT student.

Both Priestley and Yates focus on providing a personal service to clients, and don't mind being contacted outside of normal office hours. They use Exact Online cloud accounting software to work collaboratively with clients on their accounts. 

"We don’t just say it, we do it," said Priestley. "Providing great accounts and business support is more than just looking back at last year’s numbers and meeting just once a year." 

The two founders wrote out their business plan before the firm started, with help from other people they trusted.

"We had a few people who had experience of working with business plans look over this for us; essentially critiquing the same and helping point us in the right direction."

The plan helped Priestley through the firm's infant stages. It set out a road-map that defined Clarand's target clients and identified threats and opportunities facing the firm, plus detailed financial forecasts. 

Over a year-and-a-half later, Clarand Accountants still refers back to the plan and financial forecasts. The partners follow it up on a monthly basis, and continue to roll forward the forecasts for the next 1-3 years.

"The business plan really has really helped us keep focused on the direction we want to go and what our goals are – both aspirational and financial," Priestley said.

Having applied their business planning acumen to their own firm encouraged Priestley and Yates to offer it along with business modelling to clients. 

Keeping track of the plan

Priestly has a business mentor, who advisers on different aspects of the firm, including its business plan. Having a mentor or 'guru' to hold you accountable for your plan was something Ric Payne recommended in our previous article

The accountants keep a good handle on their financials on a monthly basis, and make sure the forecasting is always up to date, based on fee income, developing opportunities, direction, achievements, and so on. 

Because of changes that can take place within the wider economy, the business itself or the owners' personal lives, it's always worth subjecting business plans to a yearly or bi-yearly overhaul.

Priestley, for example, is devoting more attention to opportunities that have arisen which she had not previously considered. 

"We are now 18 months into trading, and it would be good to sit back and take stock of what we have achieved and give us time to look at where we want to go and if there are any changes in direction for us," she added. 

Older, more rigid approaches to planning that held sway in the 1980s and 90s are "dead in the water". Firms need to be more adaptable and open to whatever life and the economy throw at them.

Priestley would encourage established firms to have business plans in place - not just start-ups. This point applies to clients too and to reinforce it business planning is one of the services Clarand offers its clients. Here are the points Priestley uses to convince clients why they need it: 

  • How, what, why: A business plan is a fantastic opportunity to really look at what a business does/or is going to do and how it is going to do it. It really helps analyse the strengths, weaknesses, threats and opportunities. This is essential for a new business/start up but is also great for an established firm too
  • Team-building: It is a great opportunity for a  team-building exercise and to really look at what the business does well, what it could be doing better
  • Financial: A business plan is needed for grants, funding and approaching banks and investors. It adds gravitas to your business as a new start-up; any partners you may want to work with will often expect you to have a business plan 
  • Sense of achievement: Longer term, a business plan is a great touchstone to come back to.  It can help to compare your initial plan against what you actually achieved. Making adjustments on that basis will help push your boundaries forward and challenge you as a firm owner.

How business modelling goes "one step further"

Priestley said that a business model takes a business plan "one step further" and looks at the minutae of how the business is really going to deliver on its plan.  

"It provides detail as to the processes and systems, for example what works in the business and what doesn’t. It works very well along side cost-pricing and analysis of processes," she said. 

"Although this is something that may be difficult to complete fully when at the initial business planning stage, a business model is something that established businesses should have in place and which should be reviewed and updated. I think that this is very much an underused business tool by SMEs and should be used in every business." 

Priestley offers modelling to her clients and says it "sits very well" when the firm goes into a client business to examine the cost pricing and business strategy.

Offering services to clients

Offering business planning and modelling services to clients has proved to be a successful addition to Clarand Accountants' portfolio. 

Several client testimonials on the firm's website mention how Clarand's business planning services helped.

J Cotton of JQC Consultants said: "Due to their attention to detail I am undoubtedly going to save money by passing less tax due to efficient business planning." 

Another client, a bistro owner, said that the business advice they had received from Priestley had been invaluable. "She looks at what we need, hunts out low cost opportunities in much more detail, executes ideas and business plans as well as keeping us right on our general finances and payroll for our staff," they said. 

A win-win model 

A solid business plan, along with modelling and investment in a mentor to keep things on track has worked well for Priestly and her firm, bringing it from start-up to a healthy practice of 18-months old. 

Clarand Accountants has developed a model that works for its clients - with a more personal service and incorporating cloud accounting to cater flexibly for clients' business needs. 

And the planning - which is still ongoing - hasn't stopped there. Embedding business modelling and planning into what they do has created a repeatable revenue stream for the firm. As Payne noted, Clarand now act as the 'business mentors' making sure clients keep on top of their own plans.

For more in this series, see: 

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By exceljockey
15th Jul 2014 18:15

It would be interesting to know how many accountants actually did a business plan before starting out in practice. I did a few 'back of the envelope' calculations and had a vague idea of target market and just cracked on with it. I think the approach taken by Clarand is the right way to do it i.e. keep it a living document, not just using it to start a business but to grow the business as well.

In a previous job I looked at about a 1000 business plans of clients over a number of years and I can say in only one case was the business plan a reflection of what subsequently happened in the business. This left me with an impression that really in most cases they were a waste of time. However if it is a living and dynamic document that changes with the business then it is a worthy exercise I think.

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By [email protected]
16th Jul 2014 09:26

An organic document

I completely agree .... there is no point in preparing a business plan which is then shelved or not looked at again for three years.  Is should grow and change, and reviewed and reflected on as the business grows on a regular basis. 

 

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By Whitehallaccountants
17th Jul 2014 14:06

Keep on truckin'

We drew up a business plan and business model and I'm proud to say that it's reviewed every 6 months and we've hit every target and surpassed a few. I find it helps to keep you motivated and hungry for more. It's too easy to settle when the business gets bigger and life gets easier, but the business plan sets the bar higher and higher. www.whitehallaccountants.co.uk

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By johnpambler
18th Jul 2014 21:45

Business plan

I am going through a re launch for my business so I am completing a Business Plan this time

But not using spreadsheets but a business planning model with templates all the fancy stuff in a library

Also it should interface with the new accounting package I intend to buy the licence for, so can produce meaningful mgt accounts almost automatically

Also intend to use my business plan as training so I intend to roll this out as part aof the service I give to my new clients

Agree with points above especially the one mentioning team building I hadn't thought of that

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By VP
24th Jul 2014 15:02

Great article Claire. Thanks for the insights.

 

Veshali Patel.

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