I was recently asked by a prospective new client what I thought to be the most important consideration when looking for a new accountant. From a client’s perspective, all accountants seem very similar, offering similar services. Most even charge similar fees. But there is one key element before all else that will determine if your engagement with your accountant will be a success or not.
Simply, you must choose your accountant by whether you can communicate with them. This is not just a matter of your accountant speaking the same language, nor just your accountant speaking in terms simple enough for you to understand. You must choose your accountant based on you feeling comfortable to contact your accountant and asking for help.
You will need to discuss personal matters with your accountant. You will need to expose your finances to your accountant and allow them to comment and critique your financial (and sometime non-financial) behaviour. Without you as the client being able to talk to your accountant, your accountant will never be able to offer you the full support you need and deserve.
Communication works both ways. You should want your accountant to be your partner in your success, someone that will give you honest feedback and be your supporter when appropriate. You also need to make your accountant feel comfortable that they can pass on news that you may not like (I have yet to meet anyone to get excited about paying their taxes). You need to learn to trust your accountant over time, but having some initial doubts is healthy.
After finding an accountant that you feel comfortable communicating with, it is also important that they are not just competent at completing your compliance work but also work with you to solve problems and challenges you may face. It is also important that your accountant has the right experience to be able to assist you. It is important that your accountant is willing to push themselves for you too. It is important that your accountant can understand your situation and circumstances, and suggest solutions to any challenges you face.
Finding an accountant is easy. Finding a good accountant is not so easy. Finding the right accountant for you can take several false starts but the price for settling for an accountant you can’t communicate with will be detrimental to you and your business.
Following my earlier post about business plans, one of the more powerful tools to better understanding yourself and your business is a SWOT analysis; Strength, Weaknesses, Opportunities and Threats.
Understand what you do better than others and where you fit in. Strengths can be drawn from experience, character traits, educational and career achievements. Advantageous circumstance may include social connections and resource access.
Acknowledge where you need help. Exhaust the options for ‘filling the gaps’ which may involve additional training, drawing on the knowledge and skills of other people, or using external resources.
What are your competitors missing? Identifying opportunities is the first step to realising them. Think creatively and exhaust all possibilities to provide the broadest options.
What do your competitors do better than you? Consider how achievable your goal is, the difficulties faced, the consequences of not addressing any weaknesses. Work out actions to reduce the chance of occurrence and a back-up plan if the threat becomes real.
If you know the enemy and know yourself, you need not fear the result of a hundred battles.
If you know yourself but not the enemy, for every victory gained you will also suffer a defeat.
If you know neither the enemy nor yourself, you will succumb in every battle.
Running a business is like going into battle where you have opposing forces that you will need to address, each with their own agenda, to ensure that the final outcome is a success. Performing a SWOT analysis helps you understand where your business fits in and how to maximise your situation.
It is not enough to just know yourself without consideration to your competitors or their products/services. You must understand your customers/clients to know what they need and want. Similarly, it is not enough to just know what you are good at but also need to know where you are weak and be prepared to seek and ask for help. No one is good at everything and no one should consider going into business alone.
Also like a general business plan, a SWOT analysis will need to be updated and revised as the business and market evolves. Competitors will introduce new products and services that will challenge your existing business. Customer needs and wants will change over time requiring you to adapt with them. Your strengths and weaknesses will change as you learn and grow too.
Many new clients come to me without a formal plan, not so much for the lack of any planning but because they just don’t know where to start when preparing a plan. My quick answer for them is to just start writing.
Why are you going into business? If you are already in business, why you are already in business. What drives and motivates you into business? Why this business?
Who are your going into business with? Will you have business partners or do it alone? Who will your customers or clients be? Who will be your suppliers and employees?
What will your business actually do? Will it produce something? Will you provide a service? What is it that your customers or clients want from your business? Will you be able to meet their needs and expectations?
Where will your business operate? Will you have a shop front? Will you need an office? Will you operate online? Where will your customers or clients come from? From where will you source your supplies?
When will you start? When do you expect to achieve certain milestones in your business? Do you have a plan of when to transition out of the start-up phase?
How will you manage the business, juggling your limited time between the new business, family and friends. Will you operate the business concurrently with your existing work as your business builds up?
Now just start writing. There is no correct answers and no one will be assessing your writing. Point form is fine. Key words are better than nothing. The business plan is your tool to keep yourself accountable and to help you understand your own business. You can’t write a business plan if you don’t understand your plan for the business.
In a year or two, the written business plan will give you the opportunity to look back and assess what you got right and what you got wrong. It is an opportunity to learn that can not exist without a written business plan.