New Business Model For New World
New World means the world after COVID-19.
New Business Model means how to run the business in new method.
In professional service like Medical, Legal and Accounting, those providing services to the public are referred to as in PRACTICE. What, they are still practicing after doing 20 years business? Sound strange for some people.
Here we are exploring the Practice Models for Small Practitioners in Professional Business Services (including Accounting Firm, Audit Firm, Tax Firm, Company Secretary Firm).
According to the statistic from MIA, Malaysian Institute of Accountants, for audit firm, more than 90% of the Member Firms are sole proprietorship and partnership of 2 partners.
Click here for a copy of MIA Report, The Audit Profession in Malaysia 2018.
Many practitioners are facing common problem and they are looking for a better way to do business.
According to the Practice Management Guide published by the International Federation of Accountants (IFAC), there are few model available for Practitioners
Partnership of Equals
The Consolidator Model
In their publication, each and every model has its "potential benefits" as well as the "potential drawbacks", practitioners have to understand what he / she wants and choose the correct model (or even modify accordingly).
Nevertheless, working as a team surely have more benefits than drawbacks and the benefits surely outweigh the drawbacks or else this world would not progress so fast in last 100 years.
What are the benefits of working together?
Share cost - achieve higher operating efficiencies and cost savings;
Complement each other's skills;
Share knowledge and technical information;
Cross-selling opportunity within the group of entities;
Staff recruitment and retention;
Join force to handle bigger client / assignment;
Access to funds from more than one partner, to provide working capital for the firm;
The capacity for individuals to specialize in specific services, thereby expanding the scope to fully service a client's needs from different angle;
Practitioners can #focus doing what they do best, leave the other functions of business to the team.
A better retirement plan / succession plan can be implemented within the team.
What are the challenges of working together ?
Share of revenue
Share of profit
Management of the practice
It is highly recommended for small practitioner to work together in a team because the New World will be a more challenging environment for all.
If you think you need to change, join a team or create a team. Don't forget to have a Partnership Agreement to cover the "A to Z" including
Purpose of the firm
Ownership and profit sharing
Decision making policy
Entry and exit policy