The ‘secret accountant’ sets out their agenda for fighting back against unqualified competitors in the marketplace.
In recent years the ‘qualifieds v cowboys’ debate has made no difference to the marketplace where small practitioners continue to slug it out with the £9.99 per month club.
‘Joe public’ often seems oblivious to those precious letters that appear after our names, taking the view that any accountant is an accountant. The number of cowboys seems to be growing, as does the breadth of clients they serve, from local plumbers and electricians to hair-dressers and cleaners. Thanks to modern technology, the ubiquitous ‘cloud’ and increased connectivity, we are increasingly seeing cowboys based overseas claiming a piece of the action.
So, what hope for the future of qualified accountants?
A 1990s ACCA exam paper on Ansoff’s growth strategies comes to mind. Penetrating the compliance services market further with the same accountancy and tax services is a non-starter. Thanks to an enterprising taxman our tax laws are already some 12,000 pages long. With every Finance Act you are sure to have some new tax products for your existing clients – SEIS, EIS, SSAS, SIPP, R&D, entrepreneurs’ relief, film tax relief, statutory residence test. The list often appears endless!
Growing your client base Yet finding new clients for your existing services can still be a tall order. Companies House continues to incorporate about 1500 companies a day and more than half that number get struck off daily. So the need for start-up advice and company funeral services, particularly for those suffering from the £25,000+capital base, is definitely there.
With Google demolishing geographical boundaries every family business from Poland to Pakistan fancies a UK base given the location, time zone and history. Or from LA to New South Wales everyone owns a London property. Patent box, ATED and the new non-resident ownership rules still can win you new clients.
That having been said, Ansoff’s strategy of diversification (offering new services to new clients) can be tricky – unless you want to take back the surrendered insolvency and audit licences. Or maybe sharing some space with solicitors under the Tesco law camaraderie and creating a one-stop pharmacy for all sorts of tax and legal pains?
Focusing on niche markets With cowboys driving down prices, Porter’s strategy of cost leadership won’t work. However, focusing on niche markets like property businesses, contractors, the medical profession, pharmacists etc may offer you a competitive advantage.
A VAT specialism is complex and the place of supply conundrum against the backdrop of EU rules has created a market for some qualified practitioners. If you are confident enough, you can offer a premium service at a premium price – let’s call it the ‘Rolex’ route. You will always be respected and valued. After all the ‘chartered certified’ tag ought to command a premium.
There are many other options qualified accountants may wish to consider: merge with – or even acquire – like-minded small firms, create or join domestic and international networks, create alliances with recruitment companies, estate agents, bankers and solicitors.
Premium advisory services Premium advisory services will always be in demand because even sole practitioners are going global and need advice. Indeed, by shaping and positioning your firm as one which can provide such services, you will have an effective strategy to compete with mid-tier firms.
Last, but by no means least, don’t forget the silks’ route (aka barristers) – become advisers to the cowboy firms. They are out of their depth anyway and may need our support!
Continuing the debate Do you face competition from cowboys in your area? What steps have you taken to differentiate your firm and the service it provides?
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