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How you can minimise SME failures and churn

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The harsh truth is that most SMEs won't make it in the long term - and this ultimately affects accountants' bottom line. So what can accountants do to ensure more clients don't shut their doors for good?" 

21st Jun 2021
Founder BuBul
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The time and effort spent on winning new clients can be wasted as 20% of SMEs close within the first year and nearly 60% don’t make their fifth birthday. A key cause is lack of expert advice (three out of four SMEs don’t try to access advice, citing cost as the main factor).

So if you could offer the right advice at the right time and price, your clients would benefit, plus you would increase client retention, revenue and customer lifetime value. Accountants are already a favoured source of advice for small business owners, but mainly on compliance and tax related matters, so how can you become a trusted source of advice on other areas such as marketing, HR, legal, and all the other areas an SME may need help with?

Unless you are part of a large practice with numerous partners and staff with the relevant expertise and experience, it is unlikely you can cover all the advice needs clients may have. It can also be a challenge to find the time to advise clients on non-financial issues, let alone find out what needs they may have. For example, a client looking to increase sales may think they need advice on marketing, but they may get better results by improving conversion, retention, upsells, cross-sales or referrals!

Here are four ideas that can help you become a trusted adviser for your clients on all things business related:

Client peer boards

Peer boards are a great way of engaging with your clients and helping them solve business issues. As chair, you decide who attends (avoiding any conflicts of interest), keep the meeting flowing and get the best out of all the people present. Your clients benefit from discussing internal company issues in a confidential and supportive environment.

And, with the help of the others, they will gain new perspectives and opinions that can keep their business fresh and moving forward.

Pros

  • Revenue generating (assuming you charge for membership).
  • Clients learn from and generate referrals for each other, leading to greater revenue for themselves and you.
  • You get a better understanding of the issues clients are facing, helping you offer more services.

Cons

  • Require time to arrange and administer.
  • Unlikely to involve many clients unless you arrange multiple boards.
  • Time constraints make it unlikely that all attendees will have their issues discussed at every meeting.

Webinars and workshops

These can be excellent ways for SMEs to get advice. You are likely to have several subject matter expert clients who would be happy to facilitate a webinar or workshop.

Pros

  • Deepens the client relationship, adding perceived value to your service.
  • An Effective way of imparting knowledge to clients.
  • Can generate referrals for clients who facilitate the webinar or workshop.

Cons

  • Require time to arrange and administer.
  • Unlikely to be directly revenue-generating     .
  • Subject matter may not be relevant for attendees unless you understand what their real need is.

Hints and Tips newsletters

These are a simple way to keep you front of mind and be seen as a source of advice. You can include articles written by clients to help promote their business.

Pros

  • A cost-effective way of staying in touch with all clients who agree to accept emails.
  • A good way to promote products and services, increasing cross sales.
  • An Effective way to provide information and advice.

Cons

  • Require time and expertise to source material and administer.
  • Clients may have to opt in so you could have a limited audience.
  • The advice may not be relevant or appropriate for all recipients.

Business advice software

We’re used to using online software to recommend the best insurance policy or utilities supplier. Now using clever online solutions to understand client needs and deliver advice is becoming popular.

BuBul is a platform which asks the questions an experienced business adviser would to establish client needs, then delivers the required advice from relevant experts.

Pros

  • Identifies client needs and delivers appropriate advice.
  • Can be revenue-generating as you can charge clients for access.
  • Saves time, money and effort in helping clients be more successful.

Cons

  • Initial set up fee and ongoing monthly cost.
  • You still need to engage with the client to make sure they use the platform and implement the advice.
  • You have no control over which subject matter experts provide the advice.

Summary

There are many options firms have to strengthen client relationships. There are pros and cons for each, so you have to pick what's right for your practice. But the main decision is to do something. After all, you don't want one of your clients to be one of the 20% of SMEs that close within the first year.

BuBul is a high quality, cost-effective business advice software package for SMEs and their advisers. Find out more here.  

Replies (5)

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paddle steamer
By DJKL
21st Jun 2021 16:36

"A key cause is lack of expert advice (three out of four SMEs don’t try to access advice, citing cost as the main factor)."

To me the lack of professional advice is often more the secondary issue, the primary downfall is more often than not that the client really does not have a viable business in the first place, or certainly not enough cash to survive until it is a viable business, all the professional input at the start might have done is tell the client this sooner.

I used to review lots of business plans for prospective tenants, few who were say first time entrepreneurs really understood the plans they had constructed, they were often akin to the candidate's business plans in "The Apprentice", big on the fluffy stuff, weak re the real nuts and bolts of what drove the business (Eg wonderful bits about say menus, the offering, social media marketing yet they considered the business started fully formed with full demand from day one and they often possessed hee haw understanding of margins, overheads etc.)

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Replying to DJKL:
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By Hugo Fair
22nd Jun 2021 12:00

Is this a review of BuBul (or at least its presumed business plan)?

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Replying to DJKL:
By ireallyshouldknowthisbut
22nd Jun 2021 14:12

Anyone who cant put the salient points of a business plan down on 2 sides of A4, cant do business plan.

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By ireallyshouldknowthisbut
22nd Jun 2021 14:11

Business failure is little to do with advice.

its mainly to do with people learning how to run a business, and often finding out they cant.
or trying something and it falling.

Most of our "failed" business clients are still clients, they just do something else next time, often better the 2nd or 3rd time. One of my biggest clients set up young (early 20's), failed (twice), went into employment for 5 years, came back and now has a huge business. It happens. We have acted for them the whole time.

Quite frankly if you need to buy software to "ask the questions an experienced business adviser would to establish client needs" then you have a really really inexperienced and poor accountant on board. No wonder your clients never come back for the next business.

Get a proper accountant who can act as a sounding board to your business. Its a key part of the accountant/business owner relationship.

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By 52Walter
12th Jul 2021 06:05

Find Out why Churn Occurs.
Ensure that you have an Amazing Product.
Know your Target Demographic.
Set Appropriate Customer Expectations.
Leverage your Competitive Advantage.
Know about your “at Risk” Customers.

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