The finance and accounting sector is worth CA$14 billion, with more than 12,100 firms operating across Canada, and an annual growth of 3.7% over the last five years. Here are some tips for entrepreneurs keen to break into the financial sector:
A buyer’s profile
Owning a financial business could include owning an accountancy, bookkeeping service, credit and finance company or a financial consulting business. To be successful, you need to be highly organised and have great time management skills.
Attention to detail is another vital skill, you should be able to spot any inaccuracies or errors. The quality of your services and of your employees must be high to ensure your clients will continue to use your services and refer you to friends and family.
Great communication skills are also a big advantage for any accountant; helping your clients understand the figures and advising on decisions will make you stand out from your competitors. Possessing strong, law-abiding work ethics is also essential.
What to look for in a business
Find out what type of reputation the business has within the financial sector; if the company’s figures and client list has dropped, then you will be in a better position to negotiation the price. However, you will need to rebrand the business post purchase.
Is there a team of proficient employees who plan to stay on at the firm? Will the current owner be retiring, or opening another practise and taking their client list with them? If the client list and contracts are included in the sale, expect to pay more.
Will you be purchasing the branding, logos and copyrights as part of the sale? If the business is successful, this could be a great asset. You should also shadow the vendor for a few weeks to oversee operations and make sure their figures add up.
If you have a background in finance, then you should be a dab hand at carrying out due diligence on any potential business purchase. Hiring a solicitor or broker to help manage the sale and mediate between yourself and the vendor may be beneficial.
An advisor will also be able to highlight any risks or growth opportunities within a business on the market. When conducting due diligence, you should consider quality of earnings, cash flow, working capital, any business debt and product profitability.
You should also analyse the company’s IT capabilities to understand their current technology infrastructure and consider future growth. Reputational assessments, which involve legal, financial and social media checks, of the vendor is also vital.
Is it right for you?
To make sure your business continues to thrive, you should have your finger on the pulse with regards to the latest emerging technology trends. You also need to keep abreast with any news or developments in the rules and laws of accounting.
Running a financial business can be stressful, expect to work long hours, especially in the first few years. You should be able to handle pressure well; as the accountancy owner, major business decisions of how the firm grows will fall on you.
If you’re keen to break into the industry but don’t have enough capital to get started, consider finding a business partner. They may also bring additional knowledge and experience in the industry, and the workload and financial burden will be shared too.