5 reasons accountants make great business owners
20th July, 2015
I have made a career out of helping accountants run better businesses themselves and then helping their clients run better businesses. In working with those accountants, I’ve observed that many of them suffer from confidence and self esteem issues and tend to forget that they themselves are running a business.
Strange as it seems, I have heard of accountants who pack up their bags and go home with their tails between their legs when a client challenges them by asking ‘what would you know about running a business?’
Once we work through those issues, however, there are five very good reasons why accountants make great small business owners and why their clients should listen to them to improve their own businesses.
1. They deal with business owners every day
A typical accountant acting for business clients has between 100 and 150 business client groups on their books — some more, some less depending on the focus of the firm. What this means is that every day of the week, they see clients who are extraordinarily successful. Equally, they come across businesses that really should not be in existence.
Because of their analytical nature, accountants are able to pick the eyes out of what works and what doesn’t work. They can also repurpose something a successful client has done for another, non-competing client. They have a rare exposure to the ins and outs of business, and when they make a recommendation to help you improve yours, you can be sure that it is well thought out, considered and based on something that has been successful somewhere else.
2. They understand the numbers
Never underestimate this quality. I have seen several businesses hire business coaches who send them down blind alleys because the coach gets excited about the upside, without considering the potential risks and financial impact of a new strategy. Accountants might sometimes be slower to make decisions or provide recommendations, but that is often because they are doing the calculations to be sure an idea stacks up and the benefits outweigh the risks.
Oftentimes when a change of strategy is proposed, everyone jumps on the bandwagon, but very few consider the potential downsides. There is a reason there are many accountants in highly paid C-level roles at public companies. They are experts in risk mitigation and a valuable addition to any management team.
3. They understand the difference between profit and cash flow
Accountants do not get blindsided by ideas that look great on paper. What they want to know is, is this project cash flow positive? How are we going to finance the new strategy? What if the sales teams’ projections do not come through as planned? Their obsession on cash keeps them afloat as business owners. They understand that just because there is a profit on paper doesn’t mean they can pull as much cash as they like out of their businesses. They reduce the risk of the business being bled dry.
4. They are well educated
One challenge accountants sometimes have is that they are not taught business skills at university, and much of their training is technical in nature.
The very best accountants continually invest in themselves to develop new skills and display great curiosity when working with their clients so that they understand how business works. In saying that, however, to qualify as a Chartered Accountant or CPA is no mean feat, and accountants are exposed to a wide variety of stretching exams.
They also keep up to date with continual professional development to maintain their qualifications. This means they are well read, are often abreast of developments in business and changing landscapes and attend several conferences and seminars a year. All of this, while perhaps sounding mundane, is of vital importance in keeping their business skills sharp and benefits them enormously in running successful businesses.
5. They are respected and trusted
All the surveys show accountants are the most trusted advisor. They spend much of their time when they work in practice talking with clients. They are calm, collected, and entrusted with information that often no one else has access to.
For the most part, accountants also develop excellent networks within their client bases and spheres of influence. As such, when they venture into the world of general business, they are able to take those skills and use them in a different environment to build their businesses based on those same important bedrocks. They might not be the most entrepreneurial of folk, but they are certainly able to influence others and create win-win scenarios to the benefit of themselves, their businesses and most importantly, their customers and clients.
Further reading:
If you’re looking to step up your cash flow knowledge, check out 8 tips on managing your cash flow.