By Henry Cooper FMAAT Run your business Further considerations to starting and running your own business 27 Feb 2017 When setting up a business it is natural to spend a lot of time considering the technical nature of the business. You’ll think about the bookkeeping/accounting, what software to use, what services you will provide, what to charge and so on. We have previously looked at whether or not you have the “right stuff” to work for yourself, so what else should you be thinking about before you take the plunge? Let’s have a look at some other areas that you should be considering. Obtaining clearance This is where you have taken on a client that has previously used a different bookkeeper/accountant. As part of the engagement process, you have to do three things – issue an engagement letter, carry out anti-money laundering due-diligence and contact the outgoing accountant to: Ask if there are any reasons, why you should not accept the appointment and assuming there are none; Obtain the necessary working papers to enable you to carry out the role, that you have agreed. This can be done by email or letter. It is an important process as it might sometimes highlight an issue that the client hasn’t mentioned that could make you reconsider your offering. Always return calls/emails There will be times when you are very busy. You might have a VAT return deadline to meet or you are behind with some bookkeeping that the client needs to collect tomorrow, for an important meeting and the last thing you need is to spend valuable time responding to “less important” messages. However, you need to put yourself in the position of the client because what might seem trivial to you could be very important to them. Consider how you would feel if it was you waiting for that call. If you are really swamped and need to prioritise your work load then consider sending a brief “holding” response to let them know you are aware of their message and outline when you will respond to their query. This will help to reassure the client and keep a good working relationship. Another thing you could consider is using a call answering service. This is where you pay a provider, usually a monthly fee, to answer the call in your business name and take a message for you. You can then decide whether you need to respond immediately, or not. It is important to brief the call answering service as to how you would like the calls responded to. From the clients point of view, they will be happy to have spoken to a “real person” rather than an impersonal answering machine. Consider forming alliances When working by yourself you might be restricted as to what you can and can’t do. For instance a client might want a tax-return completing, which you can’t execute because you are not licensed to do so. Similarly, there might be a local tax-accountant, who doesn’t offer bookkeeping services. This would be an ideal alliance as you could refer work to each other. You could also form alliances with: Financial advisers Letting agencies/estate agents Banks Other bookkeepers (perhaps holiday cover) Other accountants Insolvency practitioners No job too small It can sometimes be tempting to turn down a job because it is too small. It might be a small, one-off job with little chance of repeat or ongoing work. Before you turn it down have a little think about it because if you do a good job and the client is pleased this will reap some potential benefits: The client is likely to recommend you to others The client may come back to you in the future with more comprehensive work Both have happened to me. In one case, I was asked to perform a very simple, low-cost one off task. The client was very pleased and came back a year later, with many hundreds of pounds worth of business. Be flexible One of the beauties of owning and running a small business is that you can be flexible in how you carry out your tasks. Some examples might be: A client wants you to use a different software, because that is what they are familiar with They might want a monthly report in a different format They might want you to use a larger font size As long as you are happy with their suggestions and that they aren’t asking you to do anything wrong, then it is worth adjusting. I had such a situation soon after I started my practice where a client asked if I could present payroll information in an alternative format. I agreed. This resulted in new accounts that lasted many years and brought in some substantial fees. Consider your limitations In the early days of starting a practice it can be tempting to take on a task that you are not confident or competent to do. You should always avoid these situations as the risk may be too high and the penalties for getting it wrong could be many: A negative effect on your business’ credibility A possible failure of any claim on your professional indemnity insurance Potential disciplinary action Loss of one or more clients My practice has been running for many years but I still occasionally find myself with a potential client whose needs are too complex and outside of my comfort zone. I am always honest with them about this and try to recommend someone who can help them instead. Don’t be afraid to ask for help There will be many occasions when you will be unsure of something and you should never be afraid to ask for help. Consider joining a support network where you can discuss issues with other business owners. You will often find that the problem that has been keeping you awake at night has a simple solution, so don’t forget it’s good to talk. I am lucky enough to have a circle of friends and colleagues who I can turn to for support. I also make sure I am available to offer my support in return. Don’t forget the vast array of support that is available from AAT, such as: The AAT website Informi Discussion forums Connect articles The Branch Network Master courses Don’t let clients take liberties From the outset, it’s always good to set some ground rules with your client to avoid these potential scenarios: You may work from home and your client usually delivers their records to you. However, what if they decide to pop round at 10:30 on a Sunday night, without checking with you first. Clients want to be able to call you, by phone, any time/any day and expect an immediate response. Your client always delivers the records for their VAT return, which they would like you to produce at the very last minute with just a day or two to spare before the submission deadline. These three scenarios are not unusual and many bookkeepers that I know are happy to work this way because it becomes their USP. However, if you are not happy to work like this then it is always best to make this clear as soon as possible. Make sure you are very clear in your terms of business/engagement letter so that everyone knows where they stand. Doing this will lessen the chance of any misunderstandings in the future. Ethical decisions There will be times when you will have to make a business decision from an ethical perspective. This can be a particular problem for new businesses. Making decisions based on ethics can be difficult and may result in losing clients. I’ll give you an example of something that happened to me just a few months into my (then) new business. I was asked by an IFA colleague if I could prepare some accounts to support a mortgage application. I said yes and we agreed a price. I prepared the accounts, the client got the mortgage and he paid my invoice. Fast-forward a few weeks. The person who had the mortgage application contacted me and said he was very pleased with the work that I had done, so much so, that he now wanted me to act as his accountant. There was only one issue. He told me that he had been self-employed for many years, but hadn’t got around to informing HMRC. He suggested that we ignored that fact and started afresh. Of course, I couldn’t accept the appointment on those terms so I had make the tough call and act on my ethics, so I politely decline. Henry Cooper FMAAT was AAT's 32nd President.