What the hell is business advisory?
Now this one is aimed firmly at the accountants and the bookkeepers.
A lot of difficulties have been caused by trying to define specifically what business advisory means. Typically, the industry is spending so much time trying to put something in a nice neat little basket, just like we would with a tax or financial planning. I see a lot of energy spent, when we should actually be focused on designing our products and services to fulfill our clients needs. So the question is, ” Is there a catch-all definition for business advisory?”
Now I’ve asked this at a number of different industry expos. We’ve put canvases up and had people write on them, we’ve run competitions for the best definition of business advisory, we’ve questioned it at workshops,. We’ve done all sorts of things.
The thing that comes out of it the most, the most common definition that I’ve heard, is that Business Advisory is everything other than tax.
Now, I don’t know really how specific that is. I think that’s a bit of a cop-out actually. But when we actually think of it, tax can be advisory as well. So where does that leave us?
When we start talking advisory, I think it’s important to look at the type of advisory that you are skilled to do and the type of advisory that you want to do as well. You can’t just say as a catch-all, it’s everything other than tax because that gives you such a big target to aim at. You’re trying to be all things to all people and it’s just not going to work. So I’m not a fan of that definition of it’s everything other than tax.
Do we actually need a definition then? Do we need to get so specific that we’re putting things in these little pigeonholes? I think the reason for getting a nice strong definition, is to un derstand the type of advisory that you want to do. The reason for that comes down to the marketability and the saleability of your services.
It’s very hard to sell or pitch something to a client if you’re not clear on it yourself. So you need to get very clear on what it is that you’re doing and the value that brings to the client.
This is where the art comes into it, and it can be a dark art at times when it comes to the marketing of these types of services.
The first place that I like to start when I’m working with clients in terms of looking at their advisory journey is to say, “Okay, let’s look at your client base. And then let’s break your client base down into the relevant types and not make assumptions.
You know, one of the biggest lessons I learned in my advisory journey was not to make assumptions. Thinking that the client didn’t want to buy; or that they wouldn’t be interested because they didn’t have the money. I learned that lesson the hard way by ignoring a client. I assumed, “they won’t be able to afford it. I’m not going to approach them with the next stage.”
They’d already done one of our six-month business courses but I assume that okay, they’re not going to want to go to the next step.
About a month or two later, I received a phone call from an irate client saying,
“Hey, look, I think you’ve forgotten about us. We want to do some more work with you. We think we got great value out of the course we want to continue this. Can we keep going? “
Now, that gave me the kick in the pants to realise that you can’t just make assumptions that people don’t want to do things.
What you’re looking for when you’re going through your client base from an advisory perspective, is to pull out the clients that just aren’t going to go near the type of advisory that you will be doing I’ll explain that a little.
If the type of advisory that you’re offering is business planning, strategy, and accountability, and you have a whole heap of clients who are self-managed super funds, individuals, and deceased estates, then immediately rip those out of your fee base, okay? Realise that they’re never going to touch that type of advisory. They don’t have any need for it. Instead, look at the clients in business that are going to need those services. Then break those down into the ABCs. Have a really good look at what your actual client base is and the market is there. That may make you say, “Well, geez, we really don’t have a lot of existing clients that are going to want to take up that type of advisory”. If you don’t have the existing client base that wants to take on that type of work, then you’ve got to go out and find new clients.
Okay, so by looking at your client base, you will find out what advisory you’re going to do. Remember, define what advisory you’re going to be doing. and then have a look and see whether your existing client base is going to be able to support it. If not, is there a big enough market for this outside of your existing client base? How are you going to obtain that new business for what you’re wanting to do?
At this point, a lot of people then start looking at nicheing. They might look at a particular industry. They might look at a particular type of work. They could become the “business planning guy”, you see examples of this a lot on social media where people become the mechanic coach or the foodie coach, whatever it may be. So that’s where people have got really, really clear on the type of service that they want to do. And then they’re going after that market.
Another key piece is to look at your model. If cost is a factor, then maybe you need to have some form of an ascending model, whereby clients can step their way through your services.
Some key actions for you:
- Review the client base
- Review your skill sets.
- Match skills against client what the clients are after.
- If they dont match revise offering or retrain or
- Fill the gaps with otherstaff or contractors skills
First of all, you’ve got to work out what advisory is to you. It doesn’t matter that you have this definition that’s going to take in everything. If you want to do tax advisory and that’s all you want to do? Go ahead and do it. Design your model around tax advisory.
If you want to do strategic business advisory and business planning work, then do that.
If you’re interested in just doing financial reporting, management accounting and dashboards, then go away and build your model around that.
It’s really down to what you want to define it as, but you need to work it out. That’s the point. Doesn’t matter whether your definition is the same as my definition same as the person next to you, but you need to work that out and then build your model around it. I hope that helps.
