How Chartered Accountants  help Businesses Grow

Seminar at Business Start-up Exhibition - Excel

Welcome; I’m David Adams; I’m not a chartered accountant in practice but a business coach with Vistage International, whose SME clients do work with many who are.


Who here has started a business? Who here is thinking of starting a business?


People start businesses for two reasons:


  1. because they love what the business will be doing/making/servicing


  1. because they want to make money, either to live or more likely, these days, to build and sell to give them financial freedom.


That’s all very well but as we’ll see later, ‘stuff’ often gets in the way.


  • 3 years hence – what’ll the business environment be like?


  • Water shortages in continental Europe and even here in the UK


  • Schenzen will be the biggest stock market


  • We’ll have the Olympics here


  • There will be a world-wide energy grid


  • There will be people to people banking now that we’ve lost faith in institutions


(Zopa [social networking banking] is the fastest growing financial institution in Europe)


Trust has declined in big brands – even Coca Cola – incidentally did you know that whilst Coke is No 2 on Facebook after Barak Obama,  [Anybody know #3?] No.3 is Nutella – some women apparently think Nutella is better than sex (because you can think about Nutella whilst you’re having sex!)


Web 2.0 social networking is taking over in terms of business. Will it Blend? A series of spoof adverts for BlendTEC on YouTube has quadrupled sales.


Now, I’m not suggesting that your chartered accountant will be able to act as your Web 2.0 advisor but he or she will certainly help you with many of the support services you will need to ensure that your business grows in an environment, first of uncertainty due to recession and secondly of  uncertainty due to technological change.


Remember, some of the greatest businesses have been born in a recession:

GE in 1886; HP in 1929; Microsoft in 1975; MTV in 1981; Wikipedia in 2001.


Many chartered accountants are using international web-based services in order to ensure that costs are kept manageable but you also want to be able to build a face to face relationship with your advisor. There are some 130,000 members of the Institute of Chartered Accountants of which some 40,000 are in private practice, so plenty to choose from. Go to to find one that suits you. (It’s on your handout). Whilst you are here visit our stand #552 (near the information point) and pick up more information from the staff and booklets:


  • Minding Your Business [handouts]
  • Directory of Firms
  • London Accountant magazine
  • SMEs Funding Adviser
  • Several on careers in Chartered Accountancy

Anyone can call themselves an accountant but what is a Chartered Accountant? Suffice it to say that it’s someone whose studied for many years to become qualified to help people like you and is required to keep up the knowledge in an annual assessment of themselves in what is called CPD – continual professional development. Added to this is a strict code of ethics – they won’t rip you off and try to get you to do unnecessary stuff.

Your CA will help you decide the best format for your business, be it sole trader, partnership, limited company, LLP, franchise or even co-operative.


Your CA will help you to think like your customer:

If I ask you what your business is can you express it like Starbucks not selling coffee but pleasing people with coffee? Business has to be about building relationships. Think too about your customer’s customer – will that person also be delighted with your product/service?


You don’t want to create average products for average people; you want to ensure that your customers tell their friends. Can you get your customers to tattoo themselves with your brand like Harley Davidson? Incidentally, did you know that the boss of Harley Davidson claims that their product enables 43 year old accountants to dress in leather and be aggressive?


The thing is that your CA can help you with your market research. Not just focus groups but un-focus groups. Sometimes it pays to think like a bat – upside down.


To help you become outstanding in your business, the top ten rules are:


  1. Find the best markets for growth (perhaps outside of your immediate geography, using the web) after all The World is Flat or at least, horizontal.
  2. Explore the new business landscape – even in recession there are successes. You have to open your eyes and take a look.
  3. You must live in the world of the customer
  4. Treat the customers as individuals not as average
  5. Don’t sell products, deliver experiences
  6. Do business on their terms not on your own
  7. Enable customers to achieve their dreams
  8. Embrace networks and partnerships
  9. Be more emotional and energising
  10. Don’t be the biggest, be the best.


On that last point remember it’s not turnover, its profit that produces cash. [Turnover: Vanity; Profit: Sanity; Cash is King] Of the world’s leading motor manufacturers, General Motors, the top revenue earner has the biggest loss whilst Porche has the lowest turnover and the highest profitability.


Remember to that you don’t have a real business until you, the owner/proprietor, can go away for two months and everything carries on without you.


The CA, as business advisor, will act as:


  • A general mentor and confidence builder
  • Will be the expert in the areas you are not
  • Will help you with your strategy
  • Will help you decide upon your business model by helping you work out how it will make money
  • Will help you build your business plan, which means you’ll have full information on which to make your business decisions. Simple business plan has 6 headings:
    • Vision – what your business will look and feel like in (say) three years time
    • Mission – why you are in business as far as your customers are concerned
    • Competitive advantage – how many “onlys” can you use to describe your business
    • Objectives
    • Strategies to achieve those objectives
    • Plan needed to ensure objectives are reached
  • This will be followed by your regular management accounts, which will again help your strategic thinking and not just checking that you’ve enough cash to support your business activity. Keep reviewing your budgets in the light of new information as time passes; not reworking the budget but re-forecasting the way the financial period will turn out using that new information.
  • Will help with resource requirement analysis – people, space, money
  • Will help with market analysis; determining whether there is a market for what the company is doing (or wants to do) and how big the growth opportunity is.
  • Will help you build your marketing plan – how to reach your targets/the sales chain
  • Will help with financial modelling, specifically requirements and timing
  • Will help you obtain funding – banks, corporate financiers
  • Equity versus debt considerations, though in the current environment, there may be no choice
  • Will help you with pitching to investors and to bankers (incidentally, don’t use Power Point – people tend to fall asleep or at best, look at the screen not at you the presenter – you want your targets to focus on you).
  • Helping you to pitch is most important particularly when it comes to the often overlooked shareholders agreement. The lack of this is possibly the single most frequent cause of difficulties further down the track, when you but not your partner(s) want to sell or vice versa or you want a change of strategy.
  • Due Diligence and negotiations with investors (often better to have someone pitching for you so that they can have the excuse of “going back to their principal”).
  • Will help you survive the competitive environment by helping you think it through
  • Will help you focus on supply chain management. Is your source of supply sustainable? Have you got a Plan B if your major supplier goes bust  or can’t deliver for some other reason? This is particularly relevant if you’re an importer and your supplier can o longer get credit insurance on you. Can you pay up front for your goods?


The CA will also help you look after all the stuff that isn’t really the business at all; it’s:


  • The bureaucracy
  • The administration
  • The rules
  • The regulations
  • The employment laws
  • The health and safety laws
  • The tax laws
  • The VAT rules
  • The payroll
  • The systems you need to make sure all this stuff gets done and not only gets done but doesn’t get in the way of YOU DOING the business itself.


If you see yourself as an entrepreneur, you are typically, a scientist, engineer, inventor, technologist, an expert in your own field – the chances are you know very little about running a business, business planning, raising funds, negotiating deals. You must do what you’re good at and as I said earlier what you’re passionate about. You need an expert to help with the business side of things.


A slight word of caution: the above lists are not exhaustive and indeed, whilst some CAs will be able to cover all aspects, you will need to ask questions before appointing one. The chances are that you will need to be aware of their capabilities and almost certainly, as your business grows, you will need to graduate to a larger (though not necessarily large) firm so that you obtain the help of specialists within the firm.


You will notice that I’ve not talked about Audit.  [Threshold £5.6m] – a separate service, though you might need audited accounts to satisfy bankers/investors.


Another word of caution, if you’ve recently escaped from the corporate world and are looking to set up your own business, don’t forget that you won’t be able to call a help desk when the PC goes wrong or HR, when there is a problem with a employee. All the more reason to outsource as much of the administration as possible and to have serious help from a professional in these areas as well as in those areas where you are not the expert. Even if you are, remember that your role is to grow your business; you are the company’s chief sales person creating and building relationships. Don’t get bogged down in the bureaucracy. Whatever it costs will be a great investment, helping you generate value with your business.  What you like doing will always be better done than what you don’t like doing. You can earn much more than you’ll have to spend if you get this balance right.


For example, it’s rarely possible for a new or newish business to employ a full time, fully qualified finance director there are however, many CAs who can fulfil such a role on a very part-time basis (a few hours a month) to ensure that whoever does your book-keeping is not only doing it accurately but is also ensuring that your customers pay on time and the cash comes in and you’re paying the right amounts to your suppliers and building up a good credit rating by paying on the nail.


It is vitally important to have helpful and timely management accounts with cash flow forecasts; budgets that take cash flows into account and a system that enables the future flows of business to be readily acknowledged so that the business owner knows when to stop supplying a particular type of service or product or to a specific client or customer.


The CA will help the aspiring business owner to acquire and install the right accounting systems be they online or offline. Will help you ensure you don’t pay too much for either the software or the support.


The CA will guide the business owner through the regulatory minefield particularly when it comes to the fear and apprehension that you’re getting your Vat, Corporation Tax, PAYE, and NIC correct. That your statutory accounts are prepared correctly,   even if an audit isn’t required, and filed on time to avoid the ever increasing fines being imposed these days. And I haven’t even mentioned , the Data Protection Act and the Money Laundering Regulations. Not to mention the Criminal Records Bureau or the Financial Services Authority for some activities. And then there’s Intellectual property (IP) protection and that’s another story.


When you’ve recognised that good systems are essential for compliance purposes, it’s great to know that they’re there to help you actually run your business, knowing where it’s going and how successful you’re becoming.  Your CA should be able to help you select and install those systems.


So, in summary, your Chartered Accountant will not only help you set up your business, he or she will guide you along the regulatory path and ensure that you have the right information to map out, build and succeed in your chosen field.


For more on Chartered Accountants come along to Stand 552. We look forward to seeing more of you.

Any questions?

If you would like  a copy of these check lists just leave your business card with me.

David Adams runs think tanks in the London area for Managing Directors and Chief Executives of SMEs.

Mission: To improve the effectiveness and enhance the lives of chief executives.

Results: Data shows a 2.5 times faster growth from being a member of such a group.

To learn more about this aspect of his work visit:



Phone or e mail:    +447971 267157   info@unlocking