And the survey says… many small business owners feel they are not getting satisfactory help from their accountants in becoming profitable. That is one of the results of a study done by George May International, a U.S. management firm with over 80 years of experience helping their clients do better business.
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What does this mean for CPAs? It means the business is out there… you might just have to work harder to get it. With the economy in the doldrums, many business owners are desperately seeking good advice and with CPA firms hoping to drum up new business... the answer should be obvious. Accountants are primed to be the advice providers in this troubled economy.
Take a look at what 1,000 small business owners said in a recent survey by George May International:
· 45% say their businesses are not profitable today.
· 45% rely mostly on their accountants as their chief advisors for business help.
· 20% list “other” as their chief advisors, without specification.
· 18% say their attorneys are their chief advisors.
· 17% list management consultants as their chief advisors.
Sixty-five percent of survey respondents say they are worse off this year than last. When asked why they have not been profitable, 60% of those blamed the economy, but Paul Rauseo, managing director at George May, disagrees with that automatic conclusion.
“Many business owners feel that the recession is to blame for all of their woes, but that’s simply not the case and is actually part of a bigger problem,” he says. “There are plenty of small businesses making money in this economy because they are taking care of the business side of the business, controlling costs and increasing productivity.”
Other reasons cited for recent poor performance include the competition (the number one reason, with 29%), inefficiency in the sales process, or issues related to finance, operations, or labor. Only one percent said management problems are to blame.
Among the most surprising results was the fact that only 60% of respondents said their accountants provided them with satisfactory help in making their businesses more profitable. That means CPAs could be doing much more. Rauseo recently stated that CPAs need to focus on being “solution providers.” When a client who services HVAC systems told Rauseo that his phone wasn’t ringing, Rauseo told him to pick up the phone himself. “You have 700 customers in your database,” he said. “Call and remind that that preventive maintenance is cheaper than repair.”
“Small to medium-sized businesses must have fresh thinking. They must differentiate themselves, and more importantly they must have market insight.” When asked by a news anchor how businesses can do this when they are at a financial disadvantage compared to giant companies, Rauseo answered, “They certainly can use e-mails, pick up the phone, back to the basics, do home visits, networking. These are guerilla marketing techniques we’ve been using forever. Collaboration with clients has long been the basics that we use to reach customers, and that doesn’t require a lot of money.”
People are desperate for answers going forward, but many CPAs are still just summarizing historical data. Rauseo says accountants should look at this as a golden opportunity, a wide-open market hungry for competent guidance.
With most business owners stating that they rely mostly on their accountants for advice, Rauseo says CPAs who want to increase their revenues and help their clients should step up to the plate. They need to say, “We’re here. We’re right here in front of you. And… we can help."