Accountants need more derring-do not daring don’tby
Too many accountants play it safe when greater adventure could be both challenging and rewarding. Has the time come to take a leap out of your comfort zone?
If you look at the backgrounds of the wealthiest and most successful entrepreneurs in the world today – the likes of Elon Musk, Richard Branson and James Dyson – you discover that they are never satisfied.
For most people, building up one multimillion pound/dollar business would be a miracle. However, the financial superstars always seem to be looking for expansion or new avenues to test out their business acumen. Whether it is moving from a record company into rail, airlines and space travel, or expanding from an industry-leading electric car company into social media, they never stop.
Incredibly, they and their financial backers also seem to withstand failures and even bankruptcies, regarding them as part of the game – look at Donald Trump.
Excessive risk aversion
I can’t imagine too many people running accountancy practices who would countenance the possibility of bankruptcy, for very obvious reasons.
However, we bean counters can also be prone to excessive risk aversion, which those looking from the outside might see as a weakness. That is because far too many accountants probably miss out on opportunities to boost their businesses and, much more importantly, the bottom line and their profit shares.
I know, as I am a prime example. Given the choice between a comfortable day job with an unambitious firm and little prospect of promotion or a dive into the great unknown with a bigger, better but scarier organisation, my initial reaction would be to play safe.
Eventually, experience tells us all that a degree of risk can actually be healthy.
The same applies if you are running a practice. While there is every chance that the prospective partner who claims to be capable of bringing in £1m a year in, let us say, research and development tax consultancy projects, is almost certainly selling as a dud. Then again…
Many will have read recent news articles suggesting that a record number of businesses are on the brink. Surely that should be the catalyst for considering an expansion into insolvency or the business recovery market.
Often, the best opportunities arrive accidentally. A client needs a specific service, for example the implementation of a tax-saving arrangement or perhaps a review of an IT system.
Your firm may never previously have got involved in this kind of work but is it really that difficult? As soon as you have committed a few hours to detailed research and successfully completed one project, you can both claim to be experienced and talk a good game while trying to sell the same thing to new clients.
Sometimes, it may be necessary to seek external assistance and maybe even loss-lead on the initial work to build up the knowledge necessary to get repeats.
There is a corollary of course. If you bite off more than you can chew and screw up when attempting to do something that is beyond your capabilities, then the outcome may not be quite what you imagined.
In the worst-case scenario, this could lead to an insurance claim, boosted premiums and a lost client, accompanied by an investigation by the Institute of Chartered Accountants in England and Wales with the threat of a hefty fine or even disbarment, not to mention months or even years of mental torture.
However, we are generally good at taking care, if not always paying for advice, which should significantly mitigate such dangers.
Each of us has his or her own risk profile but, to borrow a phrase, you have to speculate to accumulate and with all the uncertainty in the world and our own country at the moment, there will be many opportunities for accountants who are far-sighted enough to spot them ahead of the competition and make very satisfying returns.