Elaine Clark explains how an accountancy franchise can be beneficial to a sole practitioner accountant
If, like me, you have been glued to the BBC drama McMafia it wouldn’t have escaped your notice that the title is, of course, a play on words referencing McDonald’s. In fact, in the first episode the character Semiyon Kleiman, played by David Strathairn, made specific reference to the success of McDonald’s as a franchise; asked why McDonald’s was more popular than Burger King, he explained it was down to the simple fact that there were more of them. While both businesses are franchise operations the point remains that it is the number of retail outlets that makes both of them instantly recognisable; a recognition that would be hard to match by someone operating a single burger bar.
The same philosophy can be applied to the accounting world? A start-up sole practitioner accountant could find themselves up against well-regarded accountancy brands operating in their space, finding it hard to compete and attract new clients.
Joining up with a franchise with a brand presence will cut through this barrier to entry and give the start-up practitioner an immediate solid foundation on which to build their business. The elimination of an ‘unknown quantity’ in the eyes of potential clients can be dispelled with the new start up able to vie for new business on a level playing field with established players. Buying into a franchise brand can bring instant credibility; something which should not be dismissed lightly.
Not only that, but the franchise can provide referrals or assist in lead generation. Running an accountancy practice means having to address all business functions from marketing, selling and operations through to the actual delivery of the work. Having the channel to market via the franchisor’s website alleviates part of the pressure of keeping all the plates spinning, allowing above average business growth to be achieved; growth that should enhance the value of your business. An accountancy practice should not just be about income for today, but growing capital value for a future planned exit.
Aside from the immediate benefits of the recognisable brand name and growth, many other advantages of joining an accountancy franchise exist. The life of a sole practitioner can be a lonely one. Having the back-up, support and encouragement from a franchise can result in all of the benefits that being part of a larger organisation can bring, without any of the downside. Often you can link up with other franchisees who will be able to act as a substitute or alternate, with a reciprocal arrangement, to fulfil any professional body regulations that you may have.
Training, mentoring and support
Along with camaraderie, the franchise may offer training, mentoring and support. The world of accountancy and tax is changing at a fast past. Not only does a sole practitioner have to keep up with the latest laws without the back up of a technical department, the challenges brought about by existing and emerging technologies need to be understood. Being part of a franchise network where ideas can be shared, fears can be discussed and changes managed is invaluable. In this litigious society we live in, going it alone can be very frightening.
An accountancy franchise will suit some but not others; like everything in life it is never a ‘one-size-fits-all’. The key to exploring whether an accountancy franchise would suit you is to be very open and honest with yourself about your skills, abilities, likes and dislikes. What are you good at? What things are best left to others? What do you like doing? What are you less keen to do?
If you think an accountancy franchise might be for you then here are a few tips to get you started on your due diligence process:
- What is the initial investment and ongoing fees?
- Can you see a positive return on investment within 12 to 36 months?
- How long does the franchise agreement run for?
- What are your obligations as part of the agreement?
- Does the franchise supplement the areas that you need?
- Will your business grow as a result of making the investment in the franchise?
- Can you talk with other franchisees to validate that the model works?
- Will your business be worth more as a result of being part of the franchise?
- Do your values match with the values of the franchise?
- What is the worst thing that can happen if it doesn’t work out?
- Elaine Clark is Managing Director of award-winning digital accountancy practice www.cheapaccounting.co.uk
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