How to grow your practice - Part 1
It takes steady nerves to take risks in an unforgiving economic climate where stories of businesses biting the dust predominate and success stories are in short supply. The key to survival, according to Allan Wilson of Wilson Partners, is to find gaps in the market and exploit them to the full.
Allan’s background was working for investment banks in the City, but in 2004 he took the decision to start planning for the set-up of an accounting, tax and advisory firm. A key part of the process was to work as a part-time financial controller in two fast growing businesses with a view to getting a feel for the SME environment and gaining hands-on experience of what made entrepreneurial businesses tick.
'My brother Chris and I had been exploring the possibilities for joining forces since 2004 and in 2008 we decided it was time to stop talking about "doing our own thing" and to take the plunge,' said Allan. 'The timing was right – Chris was ready to leave his transaction advisory job with Ernst & Young and I felt I had gained some very useful insights into where there were gaps in the accountancy market.
'We looked carefully at acquisition possibilities but decided we could pay a lot for taking on an unexciting block of fees and it was better to start from scratch. So we funded the set-up of our firm in Maidenhead, Berkshire.
'The gap we had identified lay between the high street firms that were not particularly proactive in assisting their clients and the big fish that we knew quite well. In the middle was a big chunk of ambitious owner-manager businesses which were not getting the service they required – they were unloved and over-charged by other firms.
'We set our target market as forward-thinking businesses with a turnover up to £5m, predominantly those below the audit threshold.'
The brothers’ next step was to employ their father, Ross Wilson, and Alan Ross, a tax specialist that had sold their own business to RSM Tenon in 2000. 'They brought in a level of experience and expertise that no other firm of a similar size could hope to match,' Allan explained. 'Six months ago we moved to new premises and added another partner, Adam Wardle, a past client who is an expert in corporate finance.'
Social media have played an important part in growing the practice. 'For me it’s all about different channels to communicate with our network and having them all linked so they have a consistent message,' Allan explained. 'Different people hang out in different places and so being able to communicate with them across a number of different platforms is great.
'Personally, I will communicate with a different set of people on Twitter than I might by email or LinkedIn. Twitter is also great as it allows a bit more personality to be shown, which can work well alongside a slightly more "corporate" Twitter account. We make sure that any communications we send out to our network will cover LinkedIn, Twitter, Facebook as well as our blog and website.
'LinkedIn has also proved to be very effective at gaining information, “warming up” new prospects and creating opportunities for our clients. We often have clients contacting us to be put in touch with a contact they can see we have a connection to – it all adds in to going the extra mile for our clients and differentiating ourselves.
'We continue to develop our use of social media to ensure that it is focused, and adding value, rather than just doing it for the sake of it!'
Wilson Partners now has a staff of 17. 'We started with an Olympic target - to have an annual fee revenue of £1m by games - and we are well on target to beat that,' said Allan. 'Our three to five-year strategy is to focus on profit and not just fee revenue, although obviously they go hand-in-hand. The gap in the market that we were targeting when we began was larger than we thought - we are now looking at servicing ambitious owner managed businesses with a turnover of between £1m and £25m.'
Start-up business specialist
Scott and Hayley Bradshaw run Coleman Bradshaw, based in Matlock, Derbyshire. The couple, who have risen to the dual challenge of running a successful practice and bringing up three children, currently all under the age of five, also identified a gap in the market.
'We saw a need for a start-up business specialist that could provide a range of business development services to small to medium-sized companies and promise to support them throughout the life of their business,' explained Scott.
'Our business model is based on providing a full range of business support services, ranging from tax returns and HR, to marketing and finance. This is achieved by partnering with like-minded local businesses that can offer relevant expertise, so clients have once central source to service all their needs.
'99% of our clients have a turnover of less than £1m but we have particularly targeted businesses with an ambition to grow.'
Effective networking is key to the firm’s success. Scott and Hayley attend local Chamber of Commerce events, co-organise the Matlock Business Club, and are on the organising committee of the Matlock Town Team. The latter brings traders together on a regular basis to consider issues which affect improving business opportunities in the town.
'Engaging with the local business community gives us the chance to gain some insightful advice or knowledge from fellow business owners,' said Scott.
Social media also play an important part in growing the practice. The firm is very active in this area and, according to Scott, it would be 'very foolish' to ignore the opportunities it creates to build the business.
‘We update our Facebook page weekly, sharing our tips, knowledge on tax savings, raising finance, speeding up cash flow etc,’ he said. ‘We tweet several times a day and also participate in several discussions on business LinkedIn groups, including ours.’
‘But it’s important to be disciplined and not to lose yourself in this form of communication. Social media is a long game in terms of picking up business – it’s all about building relationships. Creating original content is vitally important. We aim to create a buzz and stamp our own brand on everything we do.’
Jill Wyatt, freelance journalist
Mind that gap
In 2011, the Office for National Statistics revealed that over 70% of accountancy practices in the UK employ four accountants or fewer.
While the Big Four accountancy firms have weathered the storm of the global recession very well, seeing only a 1.3% drop in their total fee income during 2010-2011, smaller practices have been harder hit, with a decline of 7.1% in their total fee income over the same period.
As a result, some smaller practices have closed - the number of very small accountancy practices in the UK (those employing four accountants or fewer) fell by over 300 from 2010 to 2011. Statistics show that sole practitioners are particularly struggling: their numbers have declined every year since 2003, with a sharp drop of 9% from 2009 to 2010.