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The Biggest No-No in Accounting Practice Business Development

In a follow up question after I made a recent webinar presentation to the professional staff of a Texas accounting firm, an associate asked, “What’s the biggest mistake an accountant can make in the business development process?”

Wow.  Where do I start?  There are literally dozens of things that can go wrong – or mistakes that can be made – that will cause your effort to go off the rails.  But, that wasn’t the question.  Which single one is the biggest … or worst?

After a moment’s reflection, I responded that it was when the accountant decides to “wing it.”

Where does this decision come from?  Well, the logic might go something like this:  “Hmmm.  It’s a referral so I already have some information about the prospect.  They have a dental practice and I serve several dental clients so I know about all the relevant accounting issues.  There’s nothing major that is going to take me by surprise, so in this instance I’ll wing it when I meet with them.  This should be easy.”

I always recommend that several preparatory steps be taken in advance of meeting with any prospect … even if you know them fairly well.
•    ask people who know them detailed questions about their situation
•    review any of their financial records (P&L, tax filings, etc.) you can obtain
•    do an internet search for both their name and business or organization
•    check out industry sources, e.g. trade associations, if applicable

Obviously, the thoroughness of your preparation varies by circumstances (e.g. how familiar you are with the prospect, the revenue potential associated with the opportunity, how well you understand the technical accounting challenges, etc.), but the best practice is to investigate and prepare in every instance.

What happens if you don’t  prepare … what can go wrong?  Here are just four examples my client firms have experienced:

Alice received a referral from an existing client who – as a vendor to the person referred – gave her a great deal of information about the prospect and his business.  Alice was told that the prospect (Bob) is in his 60s and is probably looking to retire in the reasonably near term, and that other accounting firms may be competing for the work.  Armed with this “inside information” she never asks to see Bob’s tax info.  She does go on line and finds out about the business.  Wanting to be well prepared for the obvious subject of retirement, she speaks with some professional contacts and prepares herself to discuss a number of strategies the prospect might take to structure and fund his retirement.

The meeting was a disaster because Alice’s cursory preparation never revealed that the prospect’s daughter suffered from an inherited respiratory malignancy (a rare lung cancer) and his overriding priority was funding her protracted and extremely expensive ongoing care.  Had Alice seen the prospect’s tax return she would have instantly discovered the huge medical expenses.

Or, a simple name search on Google would have revealed the prospect’s very public involvement in raising awareness and money for treatment of his daughter’s genetically-based cancer.  Yes, he wanted to retire but that wasn’t even on his radar screen.  Alice appeared clueless in the meeting and the work went to a competitor.

Erick only asked his referral source – who was a close friend of the person being referred – about the prospect’s professional life; never his personal.  In the meeting Erick was blind-sided by the fact that the prospect’s highest priority was strategizing how he was going to fund his imminent divorce.  Erick could offer nothing by generalities and lost the opportunity.

Al smartly asked for and obtained a prospect’s latest financials and tax returns and checked their business out online.  But, during their phone conversation prior to the meeting he never asked the basic question, e.g. “What’s your long term plan for your business?”  His belief that he was well prepared for their meeting was shattered when the discussion revealed the prospect’s desire to aggressively expand throughout New England and that he was seeking an accountant who could provide the tax and advisory expertise to help him make this happen.  Like Erick, Al could only offer generalities and lost the prospect.

Frank was referred to the CFO of a medium size company and met with him and two of his senior staff.  He felt things were going pretty well as their meeting progressed and was only mildly distracted when a casually dressed, 40ish woman sat down at the far end of the table apart from the group.  She took a few notes and didn’t say anything as the meeting reached it conclusion.  Unfortunately, in an attempt to “bond” with the CFO, Frank had made a couple of remarks about how CEOs were often an obstacle in the sense that their strategic desires were out of synch with the realities of cash flow, projected profitability, etc.  Yep, the woman was the CEO and another firm got the work.  Even a quick glance at “About Us” or “Management Team” on the company’s website could have avoided Frank’s fatal gaffe.

Bottom line:  In each of these examples a hugely important element of the business development equation was missed.  When an opportunity arises to obtain a new and desirable client, you can never skip the preparation basics.

As always, I am interested in your experiences.  Please let me know how preparation (or the lack thereof) impacted a client opportunity.

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