Accounting firms don't necessarily need to take a Mr. Rogers' neighborhood approach in dealing with small business clients - but it certainly doesn't hurt.
"We are part of the business community," said Dan Sautner, vice chairman of Georgia- and Massachusetts-based accounting and consulting firm Padgett Small Business Services. "We don't stand above them - we are among them."
Without this mentality and an active local role, firms often find it difficult to attract small-business clients. Once they begin pounding the pavement and participating in community meetings and events, referrals become the magic word.
Regional Southern accounting firm Carr Riggs & Ingram uses banker and attorney contacts to meet new small-business owners, according to Louise Anderson, a partner in the Florida office.
Padgett not only uses this system to take on new business, but also to network existing clients with each other. "Padgett is trying to put more money in clients' pockets by sharing business contacts with them," Sautner explained. "A dry cleaner could be used for uniforms at a restaurant. You put two client bases together, and when you take them apart, they're both bigger."
Sautner recently had phone conversations with two prospective clients - a photographer and a day care center - that got his wheels turning. "You look at what they have in common to help these two people do better. The photographer can take pictures at the day care, and there can be coupons to the day care center [distributed by] the photographer - coupons back and forth. Once you put your imagination to it, there's a dozen ways they can interact."
This kind of matchmaking becomes instinctual when viewing small-business relationships as partnerships.
"With smaller clients, you need to be much more an advocate for them, a part of their business," CRI's Anderson offered.
"The bottom line is that as long as we and the client view ourselves as an expense, instead of an investment, [the relationship] won't be successful in long run," Sautner added.
While the semantic distinction is small, the financial implications can be large at a time when small businesses are looking to trim costs and shop the competition.
The National Federation of Independent Business's monthly small-business optimism index - based on the responses of 766 randomly sampled small businesses in the NFIB's membership - showed a small drop for the fourth consecutive month in June to 90.8, with negative earning trends keeping the sector in solid recession territory. In that month, the second-year anniversary of the recovery, 69 percent of surveyed owners view the current period as a poor time to expand. Of those respondents, 75 percent blame the economy for their outlook and 10 percent point to political uncertainty.
"The biggest challenge with smaller clients is that, with what is going on in the economy, they are more price-conscious," said Mitra Mamdouhi, partner at Washington, D.C., metro-area CPA, technology and consulting firm Raffa. "Where they have been offered opportunities to go with less expensive services, the inclination is to go that route, even though it may in the long run show them not getting the service and advice they really should be getting."
Raffa has, in fact, lost clients that had no choice but to value lowered expense over investment. Many of these clients were in the mortgage industry, and when business declined by more than 50 percent, "It was all about the cost," Mamdouhi said. "It didn't matter what kind of service they were getting, they were inclined to make the change."
The firm has dealt with this by being "more flexible with billing, trying to let them do as much as they can at their level, if at all possible. We give discounts where we normally would not."
Sautner believes that businesses that have survived the "Darwinian" environment and adapted to their marketplace have done so by focusing on service and personal contact.
"Sometimes people read newspapers too much and struggle with the financial news," he added. "Large stores are trying to move volume, [small businesses and us], we're trying to move service."
From the firm perspective, this service should be proactive and make small-business clients feel as important as their larger counterparts, stressed Mamdouhi.
Where time constraints inhibit this, technology can be useful. Carr Riggs & Ingram uses e-newsletters, blogs and social media when face time isn't possible, shared Anderson. The firm also has a company Facebook page.
For less savvy clients, reference books can be critical. "Typically with our generation of clients, blogs are not something they would immediately go to," she said. They will, however, look to "the newsletter, the hard copy tax planning guide - clients bring that in with them."
Regardless of the method, communication is key. A firm's relationship with small-business clients "becomes close in a quick period of time," according to Anderson, who actually prefers the kind of consistent service required of smaller clients.
"There is a lot of contact during the year," she elaborated, unlike with larger clients, where it is "hardest to only see them at the end of year when they've already made a lot of decisions that, if they had just talked to you beforehand, could have been better decisions."
Raffa takes a similar approach. "What we to do is stay in touch year round, whether we have filing deadlines for tax returns or financial statement delivery deadlines," explained Mamdouhi. "We meet several times a year, stay in touch by e-mail and phone about what's going on in business and life."
The work of maintaining this personal level of contact also pays off when management changes.
"The businesses, individuals, family members transitioning to the next generation are all a part of the big picture for us," Mamdouhi continued. Service, then, is "not limited to financial aspects of succession planning, but includes family personalities, as dynamics can be very different from family to family. Having long-term relationships and knowing the dynamics of businesses and individuals can really be helpful to clients. What makes sense to one plan you cannot apply to every situation."
Car Riggs & Ingram provides QuickBooks and cash management training and support to their clients. "We sit down with the owners," Anderson said. "What do those financial statements mean to them? A lot of small-business owners don't understand."
Universal financial issues like college and retirement funds that affect both sides of the table make open communication and support that much more valuable, whether ranging from the technical to the personal.
"We're in the middle of a herd, bumping shoulders with everyone else," Sautner said. "You look to the right, look to your left, and ask, how can we help each other? Relating more to your clients; it should be easiest thing in world - they're going through what you're going through."
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