In our new SME insights report, we cover the main challenges faced by small business owners all over the UK – from a personal level to a global scale – and the role accountants have to play in addressing them.
We put this report together based on data from our sister site, UK Business Forums (UKBF), a thriving online platform for small and micro-business owners with thousands of new posts made every month.
The forum gives us a unique insight into what those SME owners are thinking, feeling and talking about, and we wanted to turn that knowledge into valuable information for accountancy firms.
As we covered in our first glance at the report, the research revealed an interesting range of questions business owners were asking, which in many cases revolved around specific, niche issues.
But one of the biggest messages to come out of it was that many new and aspiring business owners are in real need of professional advice – whether they realise it or not.
Do business owners know the risks?
Seeking informal advice is one of the main purposes of forums like UKBF, so it’s unsurprising that high volumes of new members are signing up to get an answer to their business questions.
But what’s worrying is the high number of posts made by users who haven’t sought any kind of accounting or legal advice on their venture, and seem to be making risky business decisions as a result.
A large proportion of UKBF members sign up when they’ve just started, or are thinking about starting their first business. They’re often unaware of the legal and tax obligations with which they need to comply, the level of risk involved in starting a business, and the amount of work it requires.
It’s something that long-time, regular users of the website often express their frustration about, and it’s regularly the cause of tension between new and veteran forum members.
As one user put it, some responses to new members’ business plans may come off as disparaging, but “people are coming on here with plans that could lose their homes and ruin their future”.
The research highlighted cases where users had made tax mistakes that resulted in significant fines, or even insolvency. Those users, who in some cases had been managing the books for a friend, a relative or a spouse, seemed to have found themselves out of their depth, dealing with a situation they didn’t realise would be so complex.
We also picked up on threads where prospective business owners had posted about their idea, but were criticised for naivety or over-optimism. Interestingly, in response to one thread about buying a shop, a forum user suggested:
“You should speak to a competent accountant, explain your business proposal, shop requirements, and setup costs, and get them to prepare a realistic cashflow forecast as well as profit and loss projections for the first two years. You might be in for a shock.”
In some cases, that “shock” might be enough to put someone off from ever starting a business – in others, it might be a constructive challenge that helps them adjust their approach.
What can your firm do?
There’s a clear opportunity for accountants to communicate with aspiring business owners about the reality and risks of running a business, and to offer guidance when they’re navigating those risks.
It’s also a powerful argument to make as an accountancy firm – that your services make the difference between business owners thriving, or potentially losing their livelihood.
Communicating this sense of urgency without focusing too much on the negatives may be a difficult balance to strike, and taking a very direct approach to this might not be right for everyone. But most firms could benefit by thinking about how they’re positioning their brand, speaking to their target market, and expressing the value of their services.
Find out more in our insight report, ‘Top SME challenges for accountants to solve in 2020’.
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