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My Week – The 7 Year Itch

18th Apr 2015
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Please allow me the space to reflect on how things have been with me in practice so far and also to express my views on how I see the future of the practice world.

As you may know from My Day blog, LinkedIn reminded me that I started my practice 7 years ago. It was not easy at the same time it has been immensely enjoyable. I thrive on the challenges that I face to make something of my business.

I am sure you will agree with me; the competition over the 7 year period has progressively got worse. There is a continuous downward pressure on fees. This is due to lack of barriers to entry and excellent information available from sources such as AW on how to set up a practice.

Let's also not forget TV programs like the Apprentice and Dragons Den that motivate people to take the risk and go on their own. I cannot see the competition easing. In fact, it will get worse.

Despite what I said, I think there is room for growth. This is clearly proven by successful practices such as Crunch, TaxAssist, and SJD. They will continue to grow.

Going forward into my eighth year, in a crowded market where 100s of practices will continue fight to get attention, I think the way to stand out is to have a strong unique brand identity.

As you know, potential clients need to find your great brand. This is where digital marketing comes in a big way. It means spending money upfront to get the returns. It is risky. At the same time, it needs to be done.

By digital marketing I mean local SEO, Pay Per Click and using the relevant social media channels.

Talking of brands I have come across more than a few websites that look either look like Xero website or TaxAssist website. Why? Best to come up with your own identity?

Another real problem is finding the right marketing partner. I am struggling here. I have not found anyone whom I can trust yet. My search continuous.

Of course, cloud technology will continue to play a key role to bring efficiency savings and provide a better quality of service. I wish some software suppliers would get their act together and make their software cloud-based.

To grow any business will need people. I get many CVs. Finding a person who is the right fit is important but not easy. Even more important for me would be to retain staff. Staff leaving, is expensive. They walk away with the skills they have gained.

An equally high risk is staff leaving and setting up on their own. They have established relationships with clients, it means clients will be less reluctant to move on to them. This risk will always be present. It takes money and time to recruit clients; then they leave to a cheaper provider whom they know.

I am aware that nothing I have said is new or you have not heard before. I wanted outline my past and how I see the future. It will not be easy. At the same time I love what I do, I have no intentions of taking it easy and retiring. 

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Replies (3)

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By KPEM online
19th Apr 2015 06:16

crowded market
Hi FirstTab,

I started my practice 5 years ago and have experienced similar challenges to you. No doubt there are more people post-qualified who are going it alone, and many non-qualified.

We love Xero and all things cloud based. Whilst this has helped our practice immensely, it has also created more bookkeeping being done by clients with the belief that they need our services less.

The truth is that the reverse situation is actually the case and by getting this message across properly we can grow our business.

Dragons Den was defo a driving factor for me taking the big step! That and being stuck in my old job with no real chance for partnership within the firm.

I would say the key things to help our growth is doing the right service for the right type of client and at the right price. Build a client base to be proud of, not just compliance based and time consuming work.

And getting good clients means better quality clients via referrals!

Totally agree that we love what we do and will always stay fresh and keep going!

Good luck FirstTab.

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Red Leader
By Red Leader
20th Apr 2015 10:29

fees and profits

@FT,

You mention pressure on fees but is there pressure on profits?

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FirstTab
By FirstTab
20th Apr 2015 16:52

Reponse

KPEM - Interesting response. Agree cloud bookkeeping does make our lives and clients lives so much easier. It also makes our work interesting by lessening the compliance activities.

RL - Agree and a good point. The pressure on profits as a result of reduction in fees per client is a bigger issue to consider. 

  

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