I was looking a couple of weeks ago at google maps and the number of accountants that are listed. There are a lot of accountants in the West Midlands area, so the competition from rival accounting practices is fierce.
Any business that has too much competition, either needs to be cost efficient or offer a different service to that of it's competitors. Competitive advantage needs to be gained. Our pricing structure is well below a lot of accounting practices as we have less overheads, we don't have a shop on the high street, we work from an office block in a reasonably priced area. We are cost efficient.
We actually started up Et Voila Accountancy Services Limited with this in mind. Our whole business plan was to act more like business advisers / consultants than just accountants. If clients just want their accounts done for statutory filing requirements, we will do that, however we do offer a lot more. We offer support to our clients who are often directors of small businesses. We aim to tell them when their business is financially weak but put in preventive measures so the business recovers before the bank manager gains too much interest! In this financial climate, you have to keep a keen eye on the businesses finances. It is no good picking this up, when you are in a really sticky financial situation. I would rather make directors aware before they find themselves in such a situation. Even if the business is doing well, it is all still about maximising the amount of money that goes into a business owners back pocket.
The problem is that it is very difficult to get in front of the right people in order to sell this premium service. A lot of companies get accountants early on and then if you want to offer them something a bit different, they are sick of people trying to sell goods and services to them, so they are not willing to listen. "I have got an accountant" is the usual response. Our company is not the only company that suffers from this scenario or the only industry.
In this case you need to rethink the situation. It's no good trying to "flog a dead horse", it won't go anywhere! Most of our work comes from networking or recommendation. When companies thank me, I ask if they know of anyone else who would be interested in what we offer. The business is growing.
Most sensible people that I talked to when I started an accountancy practice a year ago, from scratch with no customers, thought I was mad. However, I was determined to make this work. That is a strong message to all business owners, be determined and it will happen. However you need to make sure that your business pays you more than what you were paid previously, when working for someone else. I say this all the time to my customers. Why work for yourself and have the extra risk, if you don't get rewarded financially? You need to look at this while forecasting. I need to follow my own advice and the problem is that I was on a very good salary! Plus my fellow director/shareholder needs paying too.
Therefore, I have identified a couple of markets that I think that we can enter into, that will help us grow more quickly.
From the telemarketing stance, the only way you are going to get people to listen to you is by offering them something that they really do need. We have developed a late filing service aimed at directors that need to get accounts filed quickly in order to escape expensive penalties that often cost more than our accountancy fees! Plus if you offend in the first year, the penalty doubles in the second year. Not every business owner has time to focus on their accounts. They can be too busy concentrating on other issues. There is nothing wrong with this, providing you find someone like myself to help.
If you are making lots of money the last thing you want to do is bother finding an accountant. However,we can step in and sort everything out, relatively quickly to avoid that penalty and with as little hassle as possible. I keep my clients accounts up to date, so if we have an emergency filing deadline from a new client, it can be dealt with, without inconveniencing my current clients. We have sufficient staff to deal with it.
We are also going to be offering a credit control service that will be run separately to Et Voila by my business partner. This is a market with a lot less competition and one that we have a lot of experience managing.
I hope that using our company as an example, you can see how you can successfully differentiate your product/service offerings in order to make sure that your top line (sales) is high enough in order to maximise what goes in your back pocket. Profit is important and yes you need to be cost efficient but sales are important in order to generate that profit. If you don't sell enough you are not going to make money. If you can't generate enough sales in one area, create other income streams but don't loose focus. Try and create products/services that compliment one another. Don't create too many, otherwise you will not have sufficient resource to service these additional offerings. To do things well you need the required resource.