Steven Mugglestone

The more I learn, the less I know

#Rip Off Britain, a Solution for SMEs:

leave a comment »

#Rip Off Britain, a Solution for SMEs

Or Accountants get away with £500+/hour charges; The Emperor’s New Clothes and why Aldi are right!

Brand Status

Nike, Adidas, Boss, Harrods, David Beckham.  They are all recognised brand names, across the globe and all we know that we pay a significant premium for that brand.  It does not, however, stop us from going out and paying the extra, for being seen owning these brand names, vanity, kudos, style, all combine to make us believe that these are quality must have items.  We do this when we also recognise that the trainers we buy probably all come from the same factory in China or wherever or that perfume or aftershave is just water, alcohol with something that makes it smell nice.  The brand is the value, when the content is usually pretty much undistinguishable.

Most people recognise this, but it does not stop them paying over the odds for the name.

Things are changing and certainly have changed in both food and many clothes ranges in shops, own brands are becoming more and more popular and most people recognise that many own brand labels of foods are actually made by the well-known brand manufacturers from the same factories and production lines.  I have certainly personally walked around two well-known snack food factories to see both main labels and supermarket own labels being made and boxed.

The Emperor’s New Clothes

I would expect everyone knows the Hans Christian Andersen story about the Emperor’s New Clothes, but as a reminder you can always read the outline at Wikipedia:

http://en.wikipedia.org/wiki/The_Emperor%27s_New_Clothes

To a business, there is a serious message here, for all of us.  Sometimes there is nothing special, nothing new, nothing powerful or exclusive, nothing that can really add value, but we are expected to believe that there is and we act accordingly, recognising but never saying, “but, the king is in the altogether!”

Aldi are helping us see what the emperor is not wearing

I do uphold and applaud the current advertising campaign for Aldi.  Two products, side by side, the main label and their own label, with the same message from the person in the advert.  They like both products the same, but the message on the screen shows us that the Aldi own label product is a fraction of the price.

Professional Support is about people and experience and not a brand

What lessons can we learn about accountants/professional advisers and what should SMEs be wary of.

Well, brand values are prevalent in the accountancy profession and the same can be said of accountants and any professional advisers.  Well, I believe that sometimes, it can.  The brand will out.  But, we fail to recognise that service businesses provide people as their product and it is really those people that make the real difference, rather than the name of business itself.  In fact, the accountancy world is changing significantly both locally and nationally, with many established older independent firms being sold to brand names, but with many brand names failing in business and failing to develop their own businesses.  Conversely, there are other independent firms, like ourselves, being developed from senior and experienced professionals from within the larger brand names.

The reason our business and similar ones are being developed is that we want to work with SME clients and help them achieve.  It is what we do and what we enjoy.  Any SME business from start-up to larger established businesses want to work with a trusted adviser, someone they can rely on and call upon for help, direction and advice.  These are people and relationship issues and have nothing to do with a big corporate brand.  We want to build a long lasting business relationship with our clients.  At the same time, our clients can rely on the fact that our partners have been through far more business and finance experience than many others.

But we need a “name” because ….

Sometimes businesses say this as they believe that they have to have a “name” and accept the cost consequences for this.  With the Emperor’s New Clothes in mind, let us have a look as some of the facts:

I am not seeking to single out any particular firm, as the same “issues and things” can be found for most, if not all of the top 10 firms or top 20 or so franchises.  The key point to raise is that the “names” are not whiter than white and sometimes do not offer a better level of service, they are prone to mistakes, errors and fraud and sometimes, these are major problems, yet we perceive that these firms are cleverer, offer better service, better value and we are willing to pay the cost.  Many SME businesses using “names” can expect to pay up to £500 and sometimes more an hour for some directors, let alone partner/owner levels, at local offices for many areas of work, yet it is unclear why a business should accept that and what extra value they are getting for this premium.

How can we establish ourselves and take on the brands

We are building a brand, as you would expect, but by a quirk of fate rather than any pretentious reasons, we have corporate in our name, although we aim to be entrepreneurial in our approach.  Being entrepreneurial and independent, however, does not mean that we do not have the same level of corporate skills, systems and experience and, sometimes, more than many of the largest of firms.

Our partners have many years-experience working both within the largest accountancy practices and as finance directors within a variety of business up to listed public companies.  We have combined these skills and approaches to really ensure that we can be a valuable and trusted adviser to our SME client base.

Our approach is always to ensure that our client’s goals are achieved but we will always ensure that this is done by first addressing their personal and family position, after that we apply our commercial acumen and experience to really help a business achieve, working with them to set the agenda for what it is they want from a business and a business life.

This is not done by delivering pages of pre-prepared generic notes but is always personal to the client and is achieved with the support and expertise from business professionals with real wide-ranging experience and expertise.  We also always aim to do this with a smile as we look to build a great long lasting relationship with our clients.  We believe that providing the same level of services expected from large national firms, delivered locally by the same quality and experienced partners is key to what will prove to be our current and future success.

These are some of the ways that we do this:

  • Our Audit Service provides quality controlled audit work using up to date systems and managed by experienced auditors, who have been involved in large complex audits covering most business sectors.  We use this insight into a business to provide a commercial view of the strengths, weakness qualities and improvements required for a business and its systems.
  • Our Statutory Accounts and Tax Compliance Service is carried out by experienced local professional staff with many years-experience working with SME businesses.
  • Our Management Information Service works with businesses to create appropriate and tailor made reporting to help manage a business and its growth.
  • Our Finance Director Service is controlled and delivered by partners who have been FDs, raising finance; growing businesses; starting businesses and turning businesses around.  This ensures that your business can be lead in the same way as many large established business, but at a cost that suits SME businesses.
  • Whether looking for finance to start, grow, acquire or eventually to retire or sell, our Corporate Finance Service ensures specialism, knowledge and trust in a business is combined.
  • When looking to acquire a business or sell or re-structure a business our Transaction Support Service will really help.  Managed by partners with real FD experience, unlike many other firms.
  • Our Specialist Personal and Corporate Tax  Service provides innovative structures and solutions, together with Probiz Tax, to really mitigate and reduce tax costs.
  • Our Business Growth Service joins with our associated partners to help improve sales, whilst managing and reducing costs as well as controlling risks.
  • Our Wealth Management Service protects an SME, their owners and their family and builds and protects their future wealth.

Advert over, but the key point is that many, newer independent accountancy firms, as well as ourselves, are being developed in the market today and these are being developed by partners and directors formerly from within the larger businesses, offering the same service from the same experienced senior team, but at a fraction of the cost.

The times they are a changing

The last 3-4 years has seen significant changes to the world of accountants, as well as lawyers, and this looks like it will continue.

Many of the large firms growth has slowed, stopped and gone backwards.  National practices have gone bust, which cannot be a great advert to support your credentials as a business adviser, yet these firms have morphed into other competitors, who equally face problems.  Some of the largest firms have completed takeovers and/or mergers which, again, have proven to be a disaster, with the businesses being acquired appearing to be works of fiction and the subsequent redundancy programs of 10% of their staffing as a direct result of bad business decisions and policies which amount to keep growing and acquiring come what may.

The loss of traditional independents

Many of the older and established firms have been lost or have been acquired by the national firms and franchises and this is largely because the existing partners could not develop a younger partnership to take on the future of their businesses and have had no choice but seek to sell to others.

As well as other companies that we know, we believe that we are amongst a new breed of commercial and entrepreneurial firms of Chartered Accountants.  We also believe that we have the experience and provide the same level of service as the largest firms supporting SMEs, but we are keeping our costs low and we are looking to pass this on to our SME clients.  Many of the larger firms serving the SME market have to service high local salaries, significant local office costs, higher national salaries and national office costs and on top of that provide returns to their shareholders.  The pressure is on for local offices to earn more and more from their existing SME clients as well as seeking more clients with high recurring fee levels.

We stick by the Aldi business model

Aldi are striving to show consumers that they are offering the same quality of product but at a fraction of the cost and they continue to shout this out, loud and clear.  To do this they also have to ensure that their own costs are controlled and the advisers and auditors that they have used are midlands based independents, so it is good enough for them.

We also work with colleagues at Expense Reduction Analysts, http://www.expense-reduction.co.uk/, to help our clients and contacts to source alternative supply chains in order to lower their costs for many direct supplies as well as overheads.  They cannot recommend a professional adviser, but would suggest that a business looks at the charges for their audit, accountancy and tax compliance costs regularly as well and seek other firms to provide professional service proposals.

Two key reasons for my own return from Finance Director back to accountancy practice are that I really enjoy working with SME business and the other is about sharing with clients the things that I know now that I did not know when previously in the profession and these are both commercial skills as well as understanding the story of the emperor’s new clothes and trying to ensure that SME businesses do not fall for it.

We, like Aldi, aim to keep saying this, loud and clear, same service, same people providing the service just at a fraction of the cost.

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317
steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

Advertisements

Written by Steven Mugglestone

January 23, 2012 at 8:29 pm

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: