BUSINESSES IN JERSEY FIGHT THE RECESSION
The economic surveys show that many small business have struggled over the past few years. There are however a small number of great success stories out there and it’s useful to take the opportunity to reflect on what theses business have done differently and how their success could be replicated.
We feel like we are one of those companies. We provide “Virtual Finance Directors” to small and medium sized local companies which act as stepping stones for businesses between those who see their accountant once a year and those who require a full time Finance Director.
We do not work with our clients’ competitors and therefore have a hugely varied client base ranging from trust companies to mechanics, recruitment agents to plumbers. 100% of our monthly VFD clients have experienced growth over the past year and for a small number of our clients 2013 was their best ever year.
Like I said, we also include ourselves in the success stories. Over the past 2 years recurring revenues at Purpose have more than doubled, the team has grown from 2.5 to 7 and our underlying profits have increased. We have done this with an average of 9.3 out of 10 for value for money in our client surveys.
One of the key factors has been changing our proposition and delivering what business owners really value. We reviewed the traditional accountancy services which we were offering at the time and changed our game completely to create the business we are now.
Yes, we still produce the required annual accounts and tax returns but the way we add value to our clients is by really getting to know their businesses, meeting with them regularly to review their progress and by sharing some great ideas and business advice. We do all of this in a way that business owners easily understand and relate to. After all we’re small business owners ourselves and many of the problems which our clients are facing, we can empathise with.
In addition to dramatically changing our offering, we also changed the way we charge. The accountancy profession is dominated by timesheets and billable hours. We don’t charge by the hour – we don’t even keep timesheets. Our monthly agreed price includes all verbal advice and there is no fear of a surprise bill in the post.
We’ve also helped our clients re-examine their own processes and encouraged them to look at what their own clients need and value. This isn’t always as clear cut as you might expect – for example what a customer really values from a plumber goes far beyond just fixing the leaks.
You can see on Facebook that Daren Malorey is now offering £5 cash for every 5 minutes his plumbers are late! By working with our clients to truly understand their value propositions we can help set them apart from their competition.
Beneficial change also comes through focus. Many business owners spend their valuable time manning the office, doing bookkeeping and making deliveries, all in the name of cost savings.
We encourage everyone to outsource all non-revenue generating activities so they can focus on growing their business and we work with clients to introduce new technology to do just that.
Conventional advice is often to cut costs but what we find sets successful businesses apart from the rest is strategic investment in growth. Cost effective targeted marketing can stimulate demand and revenues dramatically and we calculate the sales clients must get from the marketing spend for it to make financial sense.
We see even now that local businesses must have technology playing a major role in day to day operations to be really competitive. The businesses which prosper are those who embrace change successfully and exploit technology.
For example, some of our clients have found it is now very cost effective for team members to submit timesheets through their mobile phones and have parts and stock imported into job costing systems. The errors avoided and time saved is more valuably spent on new business or with family addressing the work life balance so many business owners often struggle with.
Even within our own industry, technology is playing a major role. Cloud accounting software like Xero means we are predicting the end of the traditional small business bookkeeping role in the next 3 years. It is very obvious to us that being early adopters has been key to our growth.
Key to changing the offer to customers and embracing technology is good information and having the courage to take action. It is that courage that distinguishes businesses from their competitors.
Whilst there is little doubt in our minds that Jersey, as a whole, is recovering fast from recession it will continue to be the courageous business owners who embrace change and make calculated investments who will prosper.
Julie Heaven CIMA, Director