Is tax saving the only way to increase client profit?

Fortunately, it isn’t. This is because it is after-tax cash.
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Yet many businesses consider that the most prominent role of an accountant is to work out ways to minimise and preferably eliminate their tax bills rather than show them how to increase profits. I have sat in meetings where the business advisor has taken calls asking for the lowest price that guarantees the lowest tax bill and been bewildered when hearing a price quoted followed by an argument as to why it isn’t less.
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I would therefore like to hear from more of the following:
However, I will start by first giving you an insight into the type of clients we work with:

1. Ambitious business owners who crave suggestions for business improvement and where they can gain access to finance and therefore take all the help we give them to keep moving their business forward.

 

1. Comfortable business owners who seek help from us whenever they have problems, such as business investment plans to overcome and stay afloat.

 

1. Hard working small business owners intent on building something of value through way of business improvement strategies but struggling to afford the advice they need.

 

1. Lifestyle business owners shopping around for the lowest price to do the minimum amount of compliance work in order to pay next to or no tax at all, yet stay out of trouble.

Which of the above four are you?
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The accountants we have partnered with have learned to do this and it pays
Let’s now unpick them:

Client 1
We all love these guys. They are open minded, appreciate continual advisory and brokerage service, are determined to succeed, soak up the knowledge and advice and pay handsomely because they implement your advice, see the effects, and request for your service more.

​Client 2
The bedrock of practice income. They are solid, dependable, not too ambitious but quick to seek and act on advice to keep things afloat. They pay well and are consistent and not too hot on business growth plans​.
 
Client 3
These business owners work incredibly hard and not always well, resulting in a hand to mouth existence. Yet some have great potential and with nurturing and suggestions for business improvement can improve and grow their business. Hence turning into a winner and paying you back for the low cost fees you charged when things were tough. Such business owners sometimes only find ways to move their business forward through a venture capitalist.

Client 4
Lifestylers. They have a basic business that makes ends meet and is predicated on not spending anything that doesn’t give an instant return on investment (ROI) They want your services for next to nothing and have no loyalty or appreciation for your value.

With the breaking down of the above, have a look at your client data list and allocate one of the four categories to each and then calculate the revenue from each group and the time/resource input for each. I’ll bet all your ROI is from category (1) and (2) whilst (3) is your investment for the future and (4) is losing you money with no returns and will remain the same so long as they are not interested in long term routes to improve profitability.

You need to help category 4 turn into a category 3 client. We offer that support. If you don’t, then thy could become a challenge to your practice even though they produce revenue in the long run.

Now, back to the aggressive phone call the business advisor has just taken. He now categorises the client. If he perceives him to fall into (1), (2) or (3), he will book a compulsory meeting to discuss exactly how they will help them to achieve business goals which are aligned to their personal goals. He may say the exact pricing is impossible until it is agreed on what needs to be done, and the outcome he has in mind.

If he hears (4) he politely explains that they don’t provide such service because it aims to only work with motivated business owners to whom it can add value and improve its business modelling. 

When they finally meet the prospect they will carry out a full business assessment through way of a thorough business health check and match this against the business owner’s ambitions and present him or her with a full array of integrated services which also align every aspect of the business to the owner’s goals.

The business advisor will portray the business as a long-term business partner working together to get results from as many or as few of the services as they decide to purchase.  

To embark on the above may appear intimidating and therefore may need some encouragement. The result being, a section of clients disappearing as they are unwilling to pay the increased fees for the added value, which will serve as an excellent ROI, such as helping them get more customers, increased business performance etc. This in turn will enhance profitability.
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If you feel you may fall into one of the above categories or need assistance or business advice relating to any aspect of your business or business idea, get in touch with us today. Please feel free to call and speak to an RBSS Business Advisor on 0333 355 1696, drop us an email, or use the form below. We provide real business solutions for start-ups and existing micro and small businesses.