How you can minimise SME failures and churn
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?"
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"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.)
Anyone who cant put the salient points of a business plan down on 2 sides of A4, cant do business plan.
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.
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.