Setting up your practice
Finding your market
Once you have made the basic arrangements for your firm, it’s time to think about who your clients will be and how you will find them, reports Calum Fuller
At a glance
Undertake thorough market research
Understand the issues your target client groups face
Think about your business structure
Fundamental to the success of any firm is knowing how to position yourself in the market and not only attract clients effectively, but the clients you want. This means having a strong understanding of your competition and your target customers’ needs.
Looking through local directories, reading industry magazines and press advertising, talking to customers, searching online, collecting flyers, brochures and marketing literature and checking Companies House can all form part of the process. AT spoke to two licensed members about how they found their place in the market.
What’s your type and where do you fit in?
Knowing what marks you out as different is key to the early success of your practice. As such, it’s important to carry out both quantitative and qualitative research about your competition to understand the kind(s) of client you wish to target, possible niches you might seek to work in, and any gaps in the market you may wish to exploit.
Alasdair McGill FMAAT founded his firm with his son Andy, who comes from a marketing and PR background. They had an inkling that traditional accountants didn’t think enough about the customer experience and there was an opportunity for a customer-centric firm.
“We said: ‘Let's validate our assumptions. We think this isn't a great experience, but does anybody else?’ So, we embarked on a series of conversations with business owners to ask them about their experience of accounting,” says Alasdair. “What did they like? What did they not like? What did they wish their accountant would do more of? What did they wish their accountant would do less of? That was really valuable. That was maybe about 20 or 30 conversations then, after that, we set up some online surveys using LinkedIn and Facebook. So, in total, over the period of about three months, we had over 100 bits of data that told us what people's experiences were of accountants, what their assumptions were and what the problems were.”
Armed with that knowledge, Alasdair and Andy were able to move forward with Ashton McGill, knowing there was a demand for the approach they wanted to offer.
Laura Whyte FMAAT, however, went for a slightly more traditional approach with her Truro-based firm, Whyfield.
“Predominantly, our client base is in Cornwall (95%), and the rest is outside of that. There are so many businesses in Cornwall, with around 45,000 registered with Companies House, then you've got all your sole traders to add in as well. So, I felt like the market definitely hadn't been saturated and it would be a long time before I needed to start looking elsewhere.”
Think about your potential clients
Having a clear understanding of your customer base and its needs, frustrations and ambitions is vital. Central to this is understanding pain points and where customers currently get the services you are looking to provide.
In Whyfield’s case, Laura Whyte FMAAT’s background as a finance director of a construction company enabled her to have deep insight into the requirements of businesses in that sector.
“We could naturally attract construction businesses, because that's where my knowledge base originally started,” she explains. "We knew the business environment quite well from previous jobs and living in the area, so I felt that I had a quite a good handle on what was going on. I knew friends that had businesses and talked to people who had businesses about what their pain points were when it came to their accountancy? What were the things that really drove them nuts? I used that as a basis to see where we could do things differently.”
That differentiation, she explains, comes from the approach Whyfield takes to working with clients.
“We found that putting things into plain English was important. People told us they often feel like they are going for a job interview when they see their accountant. They feel like they have got to wear a suit and a tie and they don't really understand what they are being told, and they are just given a load of paperwork. That was the feedback we were getting, and that was just reaching out to people we knew who had businesses.
“We’re quite relaxed. We are not informal – we still dress smartly – but we are not definitely not suited and booted. We try to just tell people that there are no stupid questions, we want them to ask away and just build trust.”
For Ashton McGill, that focus on the client is central to both bringing in business and the overall client experience.
“What we have learned as we have grown is who we are a good fit for,” says co-founder Alasdair McGill FMAAT. "Generally, they are going to be turning over half a million and upwards probably up to about £5m. The sweet spot is probably about £1m-£2m of revenue. That’s who would be the bulk of the clients we now work with, and that’s who our marketing is designed to attract. We have a very clear persona of the type of client we want to work with. They are ambitious, they are entrepreneurial, they are tech savvy. They want a two-way relationship. They are not just looking for a compliance-based service, they are actually looking to build a trusted relationship with us.”
Consider your business structure
There are three possible options for your business structure. If you’re going to operate as a one-man band, you can become a sole trader. If you plan to go into business with others, or expand, you can either set up as a partnership or as a limited company. This choice will affect the tax you pay, the amount of responsibility and control you have, the amount of paperwork you’ll need to deal with, and your profits.
“We went for a limited company,” explains Whyfield founder Laura Whyte FMAAT. “Partnerships are quite popular with accountancy firms, partly because you can't see the shareholding or the percentage of ownership publicly, whereas with a limited company, that's public information. We felt it was transparent. I was the sole director, but I had two other shareholders who were investing, and I knew that I wanted to be able to bring other people on as directors as we grew.”
What’s in a name?
Of course, within reason, you are free to name your firm whatever you like.
The only stipulation is that it must not be misleading. For instance, you should only use the word ‘partners’ in your firm’s name, if you are setting up as a partnership. Similarly, you cannot use the term ‘chartered accountants’ as that is a protected term and you would have to have gone on to qualify with ICAEW or ICAS to safely use it.
“That's one of the reasons AAT has a Licensed Member Directory,” explains AAT lead marketing manager Deborah McIsaac. “The purpose of that is so our licensed members can attract clients and they can search your services, while also showing you are compliant and abide by the regulations of the licence.”
McIsaac also highlights AAT's Licensed Member Support Toolkit, which is available through MyAAT and provides a wide range of resources to help get you started, from logos and advertising through to technical support.
Be your own boss
If you would like to find out more about setting up your own practice and being your own boss click here
