Questions You Should be Asking Your Business-Owning Clients Nowby
During the pandemic, your small-business-owning clients were likely just thinking about surviving from one day to the next. Now, as restrictions ease, it's time for them to start considering long-term goals again. As their accountant, you can have this conversation with them.
If you've worked extensively with small business owners before, you're aware they tend to think extremely short term. Especially in light of the pandemic, many are mostly focused on survival. They talk about competitive challenges like big box stores or price wars started by other local businesses. They talk about issues like making payroll and stretching out payments to suppliers.
You may have been their accountant for years. They went into business because they saw an opportunity or had a brilliant idea. Maybe they were carrying on the family legacy with the intent of passing a thriving company onto their children. As their optimistic accountant, you want them to get back to seeing the opportunities, not just the obstacles. You want your client to think long term, not simply about surviving from one day to the next.
When you offer advisory services to businesses, you are uniquely positioned to help them. After all, you know their company as well or perhaps better than them. As an added benefit, you know the local business environment and how other business owners are thinking ahead.
Sit down with them in an environment free of distractions. You might go out to lunch or to the coffee shop. Carve out an hour or more if they need it. Agree to turn off your phones. Once everyone is settled, ask them some questions to help kickstart long-term thinking.
Remind me, why did you originally start your business? Now, stop talking. Your objective is to get them to articulate the vision they had years ago. They saw an opportunity. Ask them what has changed over the years. They might have opened a veterinary practice, the first in town. Now, there are three. Is there still opportunity? Inject the positives, which you should have thought about beforehand. There might be three vets, but the town’s population has doubled. Their clients have been with them for a decade. They have a loyal base.
Where do you see your business in five years? You might need to prompt them if the silence lasts. Are they building the business for their children to inherit? Better start getting them into the store now. They need to meet loyal customers. More importantly, they need to see your client's passion. Perhaps the goal is to ultimately sell the business. It’s never to early to start thinking about who they want to sell it to. What would the ideal buyer look like? Are they a group buying up smaller operations and building a regional brand? Would it be to someone wanting to leave the corporate world and be their own boss? Ask your client to put themselves in a buyer's shoes, determine what they would want to see in a viable company and work towards that goal.
Do you have a current business plan? If they do, ask them to produce it; if not, it's time to make a new one. Help them picture what the business would look like in five years. Ask, how are we going to get there? Emphasize “we” because you are on their team. You are their management consultant. To achieve their goals, they might need to increase revenue or create a more robust online presence. This might cost money, but it must be done right. It might mean it’s time to raise prices. If your business owner is complaining about competitors, does she have any idea what they are charging? It’s not all about discounting! You’ve heard the story of the barber charging $20 for haircuts. In this story, a competitor opened across the street advertising $10 haircuts. What did the barber do? He put out a sign reading “We fix $10 haircuts.” Get them thinking about how they will increase revenue.
Have you been through adversity before? It’s human nature to dwell on the negatives. Get your client thinking about how far they have come. They have weathered downturns in business before. Things were slow during the Great Recession. Get them talking about it. What did they do to get their customers back and grow the business? People often forget the innovative things they did earlier that brought them success.
What’s missing? Suppose your client has determined a robust social media presence combined with an online store can grow their business. How is that going to happen? Your client is busy running the business. They don’t have time to climb a steep learning curve. Remind them they don’t need to reinvent the wheel. Unemployment is high. Hire some talent to handle the technology side and build their online and social media presence.
What are you doing right? Ask your client what they have working in their favor. A loyal customer base should top the list. They might gripe their customers haven’t been into the store since the pandemic began, but the blame doesn’t rest solely on their shoulders. Your business-owning client needs to be reaching out to them. Do they know he has reopened? Are they shopping with a competitor? Your client has likely gathered contact information on their best customers. Suggest he reach out to them across a variety of channels. Let them know he is back in business and the shelves are stocked.
Have you thought about buying out a competitor? This question has multiple meanings. Let them think it through. Don’t be volunteering ideas just yet. They might know someone else in the trade, perhaps an older friend who has talked about selling. There’s another option, which is the fire sale. Here's how it works: Let's say your client owns a restaurant. The kitchen equipment is old. The tables and chairs look tired. Another restaurant in town folded. They are selling all their fixtures and fittings. Have them put together a wish list and the prices they would be prepared to pay. Visit their sale and go shopping.
What advice would you give to someone else? You are giving your business-owning client a really great pep talk. You are laying the groundwork for building an Action Plan, which is a formal business plan. Ask if they have ever mentored anyone. If that person was thinking about getting into the business and asked their advice, what would they tell them? Their answer would likely be “I want you to benefit from my hindsight and years of experience. Don’t make the same mistakes I made. Here’s what I would do today…” Ask your client to take the same advice they would give.
Where can you find money? Business owners often think of money coming from two sources: the bank or their own pocket. The federal and state governments are very motivated to help small business owners stay in business. Today’s big tech giants were startups once. The federal and state governments have money available through low-cost loans from multiple programs. Help your client identify them. Tell them to get that business plan together. Give them homework. Tell them where they need to apply and what they will need to submit to meet the qualifications. Follow up with them.
Even as the pandemic restrictions ease, people are in a funk. Some members of the public are afraid to go out. Some business owners can’t see beyond the end of the week. You can help them focus on the long term.
Bryce Sanders is president of Perceptive Business Solutions Inc. in New Hope, Pennsylvania. He provides high-net-worth client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor, can be found on Amazon.com.