What are business advisory services?
In the first of a two-part series, Steven Briginshaw unpicks the frequently used phrase business advisory services. You hear it a lot, but what does it actually mean?
You’re at your local bank’s networking event and your bank contact introduces you to a dream prospective client.
You go into your normal 20 seconds elevator pitch. “Hi I’m Steve, I’m an accountant and we provide business advisory services…”
Before you can finish, the prospective client interrupts, “What are business advisory services?”
It’s a great question.
It’s much like another phrase a lot of accountants use, ‘proactive service’.
There are many proactive accountants in the UK, you may be one of them, but most don’t give their clients valuable and useful information before their clients ask for it, they just use it as marketing buzzword to win work.
Similarly, a lot of accountants are using ‘business advisory services’ as a buzz word compared to the small percentage that actually are improving their clients’ businesses and making an impact.
So what is business advisory?
Through my entrepreneurial journey of starting and selling two accountancy businesses, as well as working with hundreds of business owners, I’ve found there are three different levels of business advisory services that build upon each other.
Level 1 – Number interpretation
This is going through the management accounts, dashboard and KPIs with your client explaining what is happening and asking questions based on what the numbers tell you.
As simple as it sounds, you’ll deliver valuable insight to the business owner. Remember, even if they are a numbers person, they are too busy running the business to check the numbers.
It’s still working on historic figures being a week or two out of date but you can give proactive information based on these numbers.
Level 2 – Number analysis
This is doing more of a finance controller-type role where you are creating cash flow forecasts, budgets, actual vs budget variance reports and financial models.
You’ll ask questions and give advice on how to improve or maintain profit and growth.
Again, this level is reactive working from historic information but there is an element of predictive numbers work. By updating and maintaining the budget and cash flow forecasts you will be able to provide valuable and useful information to your client before they ask for it.
Level 3 – Number improvement
This is being a finance director/business coach to your client where you work on the strategy, business model and tactics of the whole business and not just in the finance department.
In a nutshell, you’ll help the owner, through your business advice taken from the numbers, to get their business from where it is now to where they want it to be.
Proactive advice from the numbers, and your skills as a businessperson, is essential here with you using the historic and predictive info to help you not just on the day to day, but on the big picture too.
I’ve found there are many traits to be a business adviser but there are four key requirements. Check this out before jumping feet first into one of the advisory levels.
You need to:
- Ask great questions,
- Get access to the current business numbers, and
- Be able to understand and explain those numbers.
As a chartered accountant you easily have the fourth point sorted, numbers are what you are good at and love. With practice you can become a good listener and learn to ask great questions, that’s if you’re not yet at this level already.
So the only obstacle is getting the right numbers from your clients.
Or is it?
Yes, getting your clients to give you their management reports within a week or two of the month-end isn’t easy, that’s where you can add value with your accounting services.
But there are three other obstacles to delivering real advisory services to your clients which you may have overlooked.
We’ll go through what’s holding you back from delivering great business advisory services in the next article.