In case you haven’t heard, the service of preparing individual tax returns has become commoditized, and the real growth opportunities for an accounting practice is developing deeper relationships with many of the small businesses you already serve. But how?
According to the Small Business Administration, about half of all businesses with employees survive at least five years. It’s a useful threshold for establishing the test of time.
You have these clients on your books. They probably don’t need help in finding customers or managing expenses because they’ve had five years practice to get it right. If not, there are industry-specific consultants who can help. That’s not you.
Many firms already have an established relationship doing their business and personal taxes, but other problems keep them awake at night. Often, it’s the “elephant in the room” scenario.
They face a big problem but don’t know where to turn for advice. People are comfortable putting people and their jobs into compartments: You are their accountant; this isn’t a tax-filing problem. From their point of view, the problem has neither a compartment nor a solution.
What Are Some of These Problems?
- Transitioning the business to the next generation. The business is their major asset. They want to keep it in the family. Transferring assets between spouses should be reasonably trouble-free from an estate tax perspective. It’s a different story when it’s time for the children to inherit. Clients need help with estate planning and business valuation.
- Selling the business. Perhaps their children followed a different career path. They are in medicine or the military. Perhaps they have no children. The value of the business is at its greatest when it’s a growing, well-run concern. Selling a business is not as simple as selling a house or a stock portfolio. It requires an accurate business valuation and a plan to sell at a fair price.
- Retirement planning. Your small business-owning client might be a self-employed consultant. They left industry early and now sell their advice. There are more than you might imagine. Estimates range from 200,000 to 1 million consultants worldwide. Self-employed, they are woefully unprepared for retirement. You’ve seen the statistics. About half of households with Americans ages 55 and older have almost no retirement assets. Presumably your consultant is making money. There are steps they can take to catch up on retirement savings.
- Bankruptcies. If about half of all businesses with employees survive the five-year point, the statistic implies the other half doesn’t make it. Bankruptcy is a process. It requires specialized accounting skills. Certified in Financial Forensics (CFF) and Certified Forensic Accountant (CrFA) are examples of specialist designations.
- Business valuation. It’s a recurring theme. Transitioning your business to the children or selling the business is an anticipated event. Business owners are interested in having a realistic valuation for unforeseen opportunities. Another business owner suggests merging. A developer wants to buy their property. The AICPA provides a path to achieving the Accredited Business Valuation (ABV) credential.
How Do You Educate Your Clients?
Unlike other businesses, you can’t advertise on billboards or use lawn signs to advertise your consulting specialties. You have two logical channels available.
Here’s an added motivation: These services may be valuable to your client. They may also be valuable to fellow business owners facing the same problems.
- Face to face. You see each business-owning client regularly. Schedule some time to discuss the capabilities of your firm in the consulting field.
- Seminars. Invite these clients to a talk about different problems faced by business owners. Feed them, and encourage them to bring business-owning friends. People do change accountants when their situation becomes more complex.
The bottom line is that your client may do a fine job at running their business, but they often face serious issues in monetizing its full value. It’s one of several ways to demonstrate your value as their accounting professional.