Don’t wait until crisis hits before you bring in the professionals
It’s always painful to watch a business struggle.
I had a client that got into trouble about a decade ago, just after the credit crunch started to bite.
Before then, the business was enjoying a turnover in the region of £3 million. It was ranked among the top 100 UK firms in its sector. The future looked rosy.
In retrospect, the firm’s problem was probably one of pricing. It charged way above average for its products, which – when times were good – people were willing to pay for.
When its customers found themselves with shorter purse strings, they abandoned the company in favour of cheaper competitors.
Interestingly, it was when the company got into trouble that it started hiring expert professionals. Suddenly it was bringing in management consultants, lawyers, specialist accountants and others in an attempt to stay afloat.
I knew things must be really bad when I arrived at the company one day at the same time as its local MP – who, uncharacteristically, didn’t have the local press with him! Sadly, the company was forced to downsize soon afterwards before being snapped up at a bargain price by a competitor.
I was put in mind of this firm when I stumbled across this recent research by Direct Line for Business. It found that only 24 per cent of SMEs only hire external advisers when facing a crisis.
If that wasn’t eye-opening enough, it also discovered that 22 per cent have never hired a professional adviser to help their business.
This is quite incredible, especially given the sheer range of external professionals out there. From accountants to IT specialists, project managers to designers, management consultants to copywriters, there’s a lot of knowledge and experience that you can bring to your business on an ad hoc basis.
What’s holding SMEs back?
So why are so many SMEs failing to bring in the professionals? Forty per cent cite cost as the main reason, although 36 per cent say they had learnt how to do a particular skill themselves. A further 35 per cent believed they were knowledgeable enough not to need external help.
Whatever the reason, it can be a false economy to not hire specialist help when you need it. Of the firms that had hired external experts, 95 per cent reported that it had a positive impact on their business – whether by increasing revenue (65 per cent), improving business infrastructure (66 per cent) or appearing more professional to both customers and peers (74 per cent).
Don’t struggle alone
Not only are there major benefits to hiring external professionals, not doing so can land your business in big problems. In our experience, firms that wait too long before hiring an accountant lose out on possible tax savings and sometimes risk – simply through lack of knowledge – large penalties from HMRC for non-compliance.
Perhaps most important of all, setting aside some of your budget to hire experts means that you have more time to concentrate on growing your business. There’s only so far you can go if you are not only working as a business owner, but also as your own accountant, lawyer, marketer, designer and project manager!
Rather than risk burning yourself out, it’s more sensible to get the right help before you run into difficulties.
And if a couple of the things you’d rather leave to the experts are accountancy and tax advice, be sure to give us a call – we’d be delighted to help you out, with offices in Chelmsford, Cheam, Wanstead, Saffron Walden and London City.