Don’t let your business marriage become at risk of divorce.
Business relationships like personal relationships thrive on a foundation of trust, respect, and mutual benefit. The parties involved in a business relationship, much like in personal relationships, have distinct needs and goals. Just as personal partners communicate openly and compromise to meet each other's needs, business associates also need to foster open communication channels, and frequently adapt their approach to address everyone's interests.
In this article we use the metaphor of how business relationships are like a marriage.
The advisor—many of the accounting and legal practices we speak to are short staffed, desperately needing multiple additional staff members. Principals/owners are working longer hours and harder than ever just to get through the basics let alone finding the time to invest the extra attention the client needs to ensure they continue to survive and thrive.
The client—Like advisors, many clients are short staffed and still feeling COVID’s consequences. They’re too busy working in their business to invest their time to make their business run more effectively.
The result—Everyone is struggling in the relationship and some relationships will break. If the client leaves or “shuts up shop” the advisor’s fee base is reduced and beyond generating future revenue, some may not be paid or will have to write-off their debt.
So, what are some very simple, time effective ways to help maintain the relationship?
As basic as it sounds, from our experience, regular communication builds and maintains a strong relationship. Communication doesn’t have to be face-to-face or a stream of constant (and potentially unwanted) telephone calls. By developing systems in your practice to share client information, it informs both the client and advisor and enables good decision making for the client.
As consultants, we spend a lot of our time making information about a business readily available to both the client and their accountants or lawyers. We use systems that automatically collect financial and non-financial information about the business. If clients don’t have systems in place or the systems are there but are not being used properly, we help the client implement new systems or procedures to use the information which is already available but (potentially) largely misunderstood.
From the suite of reports, including financial to scorecards, information is communicated with the client and more broadly with their advisors.
Another communication touchpoint is a regular management meeting, convened with a set agenda and an appointed timekeeper to keep things on track.
To put this into perspective, we recently developed a costing model and scorecard for a client who was financially viable, but simply couldn’t work out why they weren’t generating healthy profits. Ultimately, a system was designed which allowed the client to take responsibility for maintaining their costing model and produce a monthly scorecard. They then had a regular meeting with their accountant to ensure they maintained profitability. The meetings are brief but highly focused allowing the client to efficiently work on their business with the advisor’s support, without impacting their ability to continue working in the business.
Sharing the chores
Like any marriage sharing the chores creates harmony and balance.
Discovering how to best allocate work builds a strong business relationship as the client understands the cost benefit of what the advisor does.
When we are engaged to assist a client, we determine the best use of resources, efficiency, and the best cost benefit. For example, when assisting a client to reassess their productivity and costing, we ask the client to collect the productivity information and have their accountant produce the budgets to enable our analysis.
Working out how far your clients take their book work before their accountant completes the job will provide better efficiency for both the client and their advisor.
Technology saves the marriage
Despite the overabundance of digital solutions, many clients simply don’t know how to take advantage of the software they may already have or can readily purchase and implement without much fanfare.
Firstly, we aim to get the most out of the software the client is already using, such as their accounting, sales, and marketing software. This is the lowest cost and easiest to implement as the client is normally comfortable with using it.
Secondly, we look to new software solutions that will provide the solutions and efficiency the client needs. We focus on integration with other software, ease of use, and cost effectiveness.
We can assist both you and your clients to develop the tools to ensure the business relationship is successful. Please contact your local Worrells contact to discuss how we can assist.