Phone Maximiti0800 2800 321
Contact MaximitiContact

How to turn the loss of a client into an opportunity

Often, there’s nothing that could have been done.

Well, perhaps nothing to prevent the occurrence but there’s certainly plenty that could be done prior to, during and perhaps post event.

One of life’s certainties – death – cannot be forestalled by even the most proficient and experienced doctor, and certainly not by an accountant. However, there are events, that while you cannot prevent them, you can capitalise on them and let the band play on merrily as the boat goes down.

One scenario that you may see coming but are helpless to prevent, causing you to simply stand by and watch impotently as the iceberg looms ever larger, is when your client is being purchased by another business, especially if it is much larger entity.

More often than not the departing client it is a large fee and one that has been with you for many years as you watched it grow and perhaps played an integral part in advising them as they grew. You knew in your heart that they would sell out eventually or have to “trade up” to a more prestigious firm at the behest of their bank or to enable them to pitch for ever larger contracts or funding.

However, instead of watching with a sense of foreboding you can turn the situation to your advantage, as the sale of a business presents 2, possibly even 3 or more lucrative opportunities for an accountant.

The first is helping the business to become sale-ready, often termed as “grooming for sale”. You’d be surprised how many business owners are blind to the problems that exist right under their nose or perhaps haven’t got the head to confront them. Just look at your own practice then ask an outsider to peer inside. These issues can materially affect the value and therefore the ultimate sale proceeds of the business. Your accountancy skills within the context of trusted business adviser are ideally placed to work with your client in the run up to selling. Without being sale-ready a business can often blow its one and only opportunity of exiting at a substantial premium, especially if it operates in a niche market where everybody knows everybody else. The world is a very small place and shrinking by the day. It is reckoned that any one person is merely 5 contacts away from knowing any other on the planet.

The second is to roll your sleeves up and actively get involved with the sales process. It can often get messy and drawn out, either as a result of the buyer attempting to squeeze the price directly or their solicitor doing their best to put up artificial objections under the guise of protecting their client’s interests. While this is their task, they often lose sight of commerciality and the fact that both the buyer and the seller actually want to complete the deal. Accountants are ideally placed to use their experience and insight to support their client in bypassing the solicitor and explaining the realpolitik of the business directly to the other side. Talking to the buyer’s accountant is the best antidote to the solicitors and their legendary foot dragging and seeking out or creation of problems that hitherto never existed.

Thirdly, A job well done could even lead the buyer to continue using your services for the target company, at least in the short to medium term, or perhaps even moving their own business to you, depending on the bigger picture. Even if not, it is an ideal opportunity for you to showcase your business skills and perhaps use your input as a case study to other clients and beyond. Larger accountancy firms will sometimes be unwilling to handle small clients and if they need to send them elsewhere you are in with a chance. Who knows, they may even buy out your practice if they are impressed enough and are acquisitive themselves.

Finally, as clients draw nearer to retirement you can also confront them with the reality that if they leave it too late to sell their business the value can evaporate without them even realising. It may sound like “turkeys voting for Christmas” but aren’t you duty-bound to dispense the best proactive advice possible?

It’s a win-win for everybody

About the author Norman

I’m Norman Younger BA(Hons) FCCA MCIArb and on this blog I’m going to share over 20 years of professional and business experience at the sharp end of small business in the UK, one of the world’s most enterprising nations. As a professionally qualified accountant I have experience advising start up micro enterprises and multi million pound turnover firms. During this time I have owned several business and gained valuable insight into all aspects of the day to day operations covering everything from staffing to marketing. I established and am currently a working trustee of a charity that helps people find sustainable employment and supports entrepreneurs in getting their feet on the business ladder and climbing higher.

comments powered by Disqus