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Business modelling: The new business planning

4th Dec 2013
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Accountants should focus their attention on working with the assets they already have, rather than aiming for growth, according to a recent debate.

In the final video conversation on the 21st century client-accountant relationship, Ric Payne, chief exective of Principa, sole practitioner Paul Scholes and charity owner Richard Pendlebury debated growth stimulation and business modelling.

Scholes is not a fan of growth at all costs, saying that it ultimately leads to you getting greedy and “fat”. Accountants should advise clients how to make better use of what the business already has, he added.

“Be more efficient rather than make yourself bigger. I’ve got less clients now and my income isn’t significantly different to what it was three to four years ago. I’m making better use of resources and saving myself costs,” he said.

And to assess where the business is going, business planning and modelling are key requirements.

The first step to giving the client an opportunity to sit down and plan can be something as simple as calling a client or giving them the opportunity to take stock and look at their business.

Business planning is no longer sufficient in today’s working world, Payne noted. Business modelling is now the new requirement.

“A business plan fails the instant it meets the first customer. We should think about business modelling - identifying the customer, the value proposition, what channels you’re going to use to reach them and what type of relationship you’re going to have.

“That’s the language accountants need to know and will help them grow their practice through growing their clients’ businesses,” he said.

Payne described plans as a set of hypothesis that offer a linear extension of what a business is doing at the moment. The business environment is changing so quickly that businesses and accountants can’t afford to sit back and map out a three-to-five-year business plan.

Accountants should take a more proactive role in helping clients design and develop a business model that has growth potential, Ric added.

As a client, Pendlebury said business modelling was very important, but still remains little talked about.

For more on this conversation, watch the video conversation on our Exact hub and comment below to let us know if you agree with the panellists. 


Replies (1)

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By malcolm141
05th Dec 2013 16:24

Different words, same message

The answer is for accountants to provide clients with an opportunity to step back from the day to day hassle and create a plan which has a sound financial model in terms of profitability, liquidity and return on investment.

Sackmans Accountants

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