SMEs, Growth and the Role of Accountants by Alan Nelson
In the current climate of post referendum uncertainty, accountants may hold the key to sustaining growth through the support they provide to the SME sector. Entrepreneurs are by nature dynamic risk takers, but they need help and who better to provide it than accountants?
Why the SME sector?
If we are to avoid recession, we must support the entrepreneurs that run the most dynamic and innovative of start-ups. They are full of energy and ideas but do not always have the strategic planning and execution skills required to manage rapid growth without success backfiring. With the demise of the Business Link network, and announcement late last year of the closure of Growth Accelerator, entrepreneurs were left with no official source of support.
In survey after survey, accountants are quoted by business owners as the best source of advice about their business . So for accountants this adds up to both an opportunity and a responsibility. Whether operating in a finance role within an SME, or providing an external accounting service, accountants have a role in enhancing professionalism across the whole planning process, not just the preparation of the financial forecasts.
Indeed, research also shows that entrepreneurs most often buy business consultancy services from accountants "following the provision of traditional statutory our compliance services" . And that makes sense to me. I have always maintained that the provision of government subsidies for consultancy or training misses the point. The barrier for most SMEs in taking up offers of consultancy, is doubt as to whether it will be useful or just waste of their most precious resource: time. The accountant bypasses that concern because the entrepreneur already knows them and shouldn't have to start by explaining their business and how it works.
What is needed?
So that seems to deal with the demand side. There is a need, and accountants are perfectly placed to help - and with core accounting functions being increasingly automated, this should come as welcome news. The question we all need to ask ourselves, is whether we have the strategic planning skills to act as an effective partner for growth. Entrepreneurs want help with some pretty hard questions:
How do you come up with innovative ideas?
How much risk should we take?
How do I make sure that I translate the big vision in realisable action plans?
What resources should I put in place and when?
What KPIs should we measure to monitor what we are doing?
How confident do you feel helping someone to answer these questions? Take a moment to think through the process and the skills required:
1. Creating a growth plan
Where is the business now? What sector does it operate in and what are the competitive pressures? Where do new ideas come from? How big is the market and therefore the opportunity? How does the business deliver value to its customers?
2. Resourcing the plan
Are the right resources in place in terms of people and capability? Does the management team have the right skills? If not should they learn them or get help? Are the finances in place?
3. Making it happen
How do you align the organisation behind the plan? Can the managers communicate the vision and take the organisation along for the ride? How will you measure progress? What KPIs should they put in place? What happens when it goes off track? How do you revise the plan but retain the vision?
It's a daunting list. Where do you feel well equipped to help and where would you be less confident? The resources are out there to make sure you have what it takes to be a trusted business advisor. If you can take a more systematic approach to your CPD this year and address those areas, you could provide really high value advice to you clients or boss, create additional fee income or advance your career, and help the UK economy avoid recession.