How Consultants & Accountants Can Use Technology To Get More Clients
Two major government reports into small business advice reveal a number of important trends that strongly affect the future for consultants and accountant practices.
https://www.gov.uk/government/statistics/small-business-survey-2019-businesses-with-employees
Which covers:
Micro businesses - 1-9 employees
Small businesses - 10-49 employees
Medium-sized businesses - 50-249 employees
And…
https://www.gov.uk/government/statistics/small-business-survey-2019-businesses-with-no-employees
Which covers sole traders.
The focus of this article is particularly on the microbusinesses and sole traders, which make up 94% of all businesses and struggle to afford the cost of effective advice.
So, they are not popular clients for consultants and accountants who struggle to advise them profitably on inadequate budgets, and instead focus their attention on bigger business that pay better but are harder to secure.
We have ploughed through all 136 pages and 8 spreadsheets to get to the bottom of this and explore a way ahead that solves the cost and effectiveness problem.
First the factual stuff – what small businesses are doing to get advice:
Major decline in advice being sought since 2010
Increase in the proportion that pay for advice (55% sole traders - 64% micros)
Increase in the amount paid for advice (£1455 pa sole traders - £3500 pa micros)
Major obstacle to success cited as competition
Mainly seeking advice in how to improve (in descending order):
Growth
Efficiency
Productivity
Finance
Marketing
Innovation
Advice mostly delivered face to face (70%)
Sole traders ask the Internet a lot more (10% v 3%)
10-year decline in people training (58% v 42%)
Accountants and consultants have 55% of the advice market, roughly equal
No other source has more than 10%
Accountants are overtaking consultants, for the first time
Online technology is the only way to unlock this £10bn pa neglected market
Businesses are getting smarter – better able to work out their own answers and self-learn
Cessation of government funding for advice and training in 2010 has contributed
More are inclined to pay, and well, for solutions
Accountants are overtaking consultants for business advisory work
Driven by reducing compliance work and supportive software developments
Accountants and consultants need to get smarter at the same rate as their clients
Affordability is a serious barrier to a small business getting enough advice to make a permanent difference – they are only buying 3-7 days pa
Despite unaffordability most advice is face to face which is costly to provider and recipient
Lack of clarity on what constitutes business advice and how to deliver it
Now the opinion stuff – what’s going on for the consultants and accountants who provide the advice
Accountant advantages include:
Readymade client base for compliance work to whom they can also sell advisory work
Automated accountancy processes for time/cost saving
Staffed premises to resource marketing and client operations.
Professional training, standards, and ethics
Trusted to do the right things for the client
Business consultant advantages include:
‘Whole business’ understanding
Business evaluation and solution skills
Comfortable with selling
Confidence to forecast client performance and value
Skills to implement client actions and train for results
Offset by:
Accountant disadvantages including:
Narrow business understanding
Risk and uncertainty in projecting client futures and losing them
Compliance work leaves no time to develop a professional business advisory profit centre
Consultant disadvantages including:
No professional training, standards, and ethics
No barriers to entry
Not well trusted to act in client interests
So, both these groups are serving the same market but differently.
And the steep decline in the numbers of small businesses seeking advice is a clear indication that that neither is serving it well.
The reasons are clear from this review of their strengths and weaknesses.
Is there potential synergy between them that could better serve the market?
We say yes.
United, their skills and resources are almost totally complementary.
But that has been tried many times and failed, because the 2 approaches are in conflict. One is dealing with accurate data in order to comply with reporting on past, factual performance whilst the other is asking the client to look ahead for what may be possible, then up-selling costly services leaving him / her confused and sceptical.
This will not be resolved until there is an integrated approach
…where clients are inducted to a monthly workflow of business plan, budget, management accounts, KPI reports, performance assessment, problem identification, action plan implementation, reviews, tax returns, Companies House returns, payroll and so on.
In other words, putting accountancy and consultancy together seamlessly to produce a wholly new service that secures clients for life, anticipates their needs before problems arise, growing as they grow and reversing the downward trend in businesses seeking advice by taking it to them first.
Fine, but that doesn’t deal with the affordability problem.
The basic rate of £500 per day buys 1.5 days pa for a sole trader and 7 days for a 9-employee micro.
Given that it takes 30 days work pa to make a real and permanent impact on performance and value there is an impossible gap.
But what about automation?
Does all that work have to be done manually and face to face?
Because that’s what’s happening right now. Accountancy work is only part automated and consultancy work is not at all automated.
Could there be technology solutions that delivers 30 days of value within the budget of £100+ per month?
The secret can only lie with artificial intelligence and machine learning, all operating online.
10 years ago the Runagood® team started work on automating everything a consultant does with the objective of reducing day rates from £500 per day to £1 per day.
Manual, repetitive actions, including travel, consume 90% of consultant time so the client only gets £50 per day creative value i.e. face to face thinking and interaction time.
But telescope £450 per day into online automation and suddenly there is only a need to charge £50 per day for the equivalent of 2-3 days per month.
And that’s how to provide 30 days work a year for the cost of 3-7 days.
So that deals with affordable consultancy, what about affordable accountancy?
There is a good deal of accountancy automation software already that does much of what is needed without the need to leave the office and Zoom does the rest.
By combining the 2 advisory and compliance strands in a year-round workflow, the smallest clients get a seamless service for £200 per month, scaled up according to size.
But how can accountants and consultants profit from such low pricing?
Volume.
The integrated programme takes 30 minutes per client, per week to sell and deliver, without leaving home.
And that’s a capacity of 80-100 clients per fee earner, paying an average £300+ per month fee = £24,000 - £30,000 per month.
Want to know more? Find out here