Chairman of the Tax Advice Network and BookMarkLee
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Plan ahead to build your start-up client base

22nd May 2014
Chairman of the Tax Advice Network and BookMarkLee
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AIA

In 2012 I highlighted some proven ideas to get your first clients and some preliminary tasks to ensure that you wouldn’t waste time money and energy, explains Mark Lee.

What follows adopts a different approach and focuses on how you might plan ahead to build up your client base BEFORE you start a new practice.

You did what?

I have the utmost admiration for those who choose to start their own practice. The bravest and most ambitious are those who make the decision but have no existing bank of clients on which to rely at the outset.

I have less positive thoughts about those who start out without a plan as to how they will build up their client base. ‘Hope’ alone, even if combined with hard work, will rarely be sufficient. If you are driving in the wrong direction it will take a long time to reach your destination.

They came with me

It is quite common to start out with some of the clients that you used to work on at the firm for whom you used to work. Ideally you would discuss this with your previous boss and secure their agreement to those clients whom you would like to take with you. The clients themselves need to be comfortable with this too.

It is rarely a good idea to ‘take’ clients surreptitiously or to pursue them after you have left. It’s not ethical and thus is in breach of the ethical principles that should govern the behaviour of all professionally qualified accountants.

At best such an approach may just create bad feeling with your previous employer and colleagues. At worst you may have to defend a legal action for breach of the non-solicitation clause in your employment contract.

They followed me

Years ago this would rarely have been a genuine argument. Now it could well happen due to personal connections that can be built up via social media and LinkedIn.

Let me be clear. If you look to connect with clients online in anticipation of encouraging them to follow you when you leave your current firm you are being disingenuous. You will also, almost certainly, be in breach of your employment contract and open yourself up to legal action when you make your move. Many clients would be unimpressed by this tactic too.

However it is equally feasible that some clients might indeed choose to follow you when, or some time after, you set up your practice.

Your office number, address and email will all have changed when you moved to set up your own firm. However your mobile number may well remain the same, your Twitter handle need not change and, most importantly of all, your LinkedIn profile will provide a simple way for anyone to keep in touch. It is also easy for anyone who knows your name to find your new contact details and website and to see what you are doing.

Social media and LinkedIn

I feel the need to restate that what I am suggesting here is not about you taking any active steps to encourage clients to move away from your current firm when you leave.

Instead I am simply highlighting that in a LinkedIn world anyone who has known you in the past can stay in touch with you or find you again in the future. The same is true of followers on Twitter and ‘friends’ on Facebook as well as through other forms of social media.

And this is why I stress the value of planning ahead.

The earlier in your career you ensure that your LinkedIn profile works well for you and that you start building connections with clients and contacts there the better. Starting to do so just before you leave to build your own practice is not a good idea.

Much better to routinely use LinkedIn to forge connections with everyone you encounter in a business context. Also, to join relevant LinkedIn groups and to be active and helpful in group discussions. This all builds your personal profile (subject to any reasonable constraints imposed by your employer re your use of social media and LinkedIn).

If clients like you and if they then miss you once you have moved on they will be able to find you through LinkedIn – or whatever other social media you and they use.

I shared further more detailed tips for building your LinkedIn profile as a start-up practice in the first part of a series on LinkedIn for startups.

Planning v hoping

Returning to my initial point you will want to evidence your accountancy skills and business knowledge by formulating a workable business plan before you start up your practice.

Of course this is tougher to do if you are suddenly fired or made redundant. It’s tougher in that you have to do things faster but you still need a business plan of some sort. New clients aren’t going to find you unless you take some positive action. And do remember that spreadsheets make it very easy to forecast big profits. What is more crucial is to be doing whatever you need to do to generate the clients that will allow your spreadsheet’s predictions to come true.

Related articles:

Mark Lee is consultant practice editor of AccountingWEB. Beyond this he facilitates The Inner Circle group for accountants, is a regular speaker on How to STAND OUT and be more than ‘just another accountant’ and is chairman of the Tax Advice Network of independent tax specialists.

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Replies (7)

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By KPEM online
23rd May 2014 07:56

clients who follow
I have dealt with this scenario. As a manager in previous firm many clients dealt with me only with no partner contact. Clients saw myself as the person sorting their affairs. When i went out on my own, many tracked me down.

Despite trying my utmost to smooth out this situation as best possible, my efforts were futile. Clients choose who they want to work with but my previous firm failed to understand this. I copped flack for several months despite doing what i considered the most ethical things, such as contacting my old firm every time a client contacted me and trying to arrange for them to meet the client and put a proposal in place so that they stay put! Problem was my old firm seemed to be quite arrogant and felt that it was only a panic attack by the client, they wouldnt actually leave.

end result was clients leaving on grounds that these meetings were never set up and they felt the old firm didnt want their custom anymore.

so despite my good actions and intentions and agreeing this process before i left, clients make their own choices and you cant control how the old firm reacts or feels towards or about you. But always do the right thing. And be careful which clients you accept in the process!!

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Replying to Wilson Philips:
Mark Lee 2017
By Mark Lee
23rd May 2014 08:59

Well said @sparkey999

sparkey999 wrote:
despite my good actions and intentions and agreeing this process before i left, clients make their own choices and you cant control how the old firm reacts or feels towards or about you. But always do the right thing. And be careful which clients you accept in the process!!

Best to do the right thing and to be seen to be doing the right thing.

sparkey999 wrote:
 And be careful which clients you accept in the process!!

Another very good point. You may think that your old firm would be pleased to get shot of some low value troublesome clients. Before you agree to take them on do consider whether they will  really help you build your practice or just cause you grief.

Mark 

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By johnjenkins
23rd May 2014 10:54

@sparkey999

You obviously install confidence in your client relationship and no doubt your previous firm saw that quality.

By allowing you total contact with the client, your old firm was committing a cardinal sin, and that is to basically give their clients away.

Did you think/hope that they would follow when you set up?

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By KPEM online
23rd May 2014 12:14

@johnjenkins

I think that allowing others to manage client affairs is OK and actually a good thing for growing and developing a practice, but the principal/partner should always see their clients even if it is only to sit in on their stuff once a year.

I didn't think many of the clients would follow. I did local advertising and networking straightway to try to generate new clients. A few agreed to move with me and these were clients I brought to that firm anyway, and I pushed for extra work and referrals from them as a starting point.

One client who moved was with the old firm about 25 years. Client was having cash flow issues and didn't want any more surprise bills. Asked old firm for a fixed price quotation on 3 occasions. Met the partner a few times but no fixed price was forthcoming. The last meeting basically involved the client asking why they were not willing to give the fixed price only to be told "well we think you're going to Sparkey999 which is why you want a fixed price to compare rates so why should we bother, you've made your mind up"

Client duly leaves, contacts me for a price, was provided with price, agreed to price and pays in advance by SO every month since. Sale of business is imminent and more fees to myself!

All I can say is that sour grapes should be spat out quickly and get back to focusing on your business/clients.

As Mark says, always do the right thing and be seen to do the right thing. Not everyone will see it that way, but if an independent reasonable person would see it that way, and you are confident in your own actions being ethical and more than fair in business, then you have little to worry about.

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By zarathustra
23rd May 2014 14:54

johnjenkins raises an interesting point, but...

How do you build a sizeable firm without handing over management of client relationships to others?

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Replying to andy.partridge:
Mark Lee 2017
By Mark Lee
25th May 2014 14:46

Sharing rather than abrogating responsibility

zarathustra wrote:

How do you build a sizeable firm without handing over management of client relationships to others?

I would suggest it is a question of evidently sharing responsibility and contact without completely abrogating responsibility and ensuring that each client is aware of your ongoing involvement.

I am aware of one sole practitioner, sadly recently deceased, who built up a sizeable practice with over 100 employees over the last 30 years. So it evidently can be done. I suspect that one other factor here was the type of leadership that inspires loyalty among staff at all levels such that they prefer to stay rather than to leave and run their own practice.

Mark

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By johnjenkins
23rd May 2014 17:08

@zarathustra

Mark Lee would expect me to say "If you need to ask that question you shouldn't be in business" and to a certain extent that is what I think.

However I made the point of "cardinal sin" and I will explain.

You should never lose sight on how you built up your business. You built it up on client relationship and you should never hand that over to anybody. Sometimes when a business gets big and you have a particularly good assistant then it may be split, but if you want to keep it all to yourself and it becomes too big for you to handle (say 300-500 varied client base) then you have to make a decision to let other people do the work and all you do is client contact, whether on the golfing range, pub or why.

I suspect that with 100 employees comes at least 2500 clients. So personal contact is of paramount importance.

There is, of course, another scenario, that the practitioner hand picked his staff so that he needed 100 of a particular personality. Don't forget not everyone wants to run their own business.

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