Want to give your business a spring clean? Here's how

David Hesketh, group M&A manager at Perspective Financial Group, offers his tips to getting your business in order.

One suspects that the tradition of the ‘Spring Clean’ has been somewhat lost in the modern age. Long gone are the days when everyone waited the best part of six months before opening the shutters, taking all belongings outside, and dusting and beating everything to within an inch of its life. However, this time of year can provide a great opportunity for IFA practices to ‘Spring Clean’ their operation and ensure everything is as it should be.

For those considering their exit strategy and options ahead of the introduction of the RDR, a ‘Spring Clean’ is also recommended given that it can offer up various methods and changes which can be introduced to make sure the practice is in the best shape possible for a viewing by potential purchasers.

So, where can practice owners start when they are looking at their own business, how it currently operates and where there might be potential changes to be made?

The most obvious starting point may well be the most important part of the practice, the client database. Many firms operate strong databases however there is sometimes an urge simply to update it with new information and not renew the existing data.

Ultimately, this is a poor option given that most practices use the database for marketing and for client communication and contact. Our marketing manager would no doubt urge me to remind everyone that any marketing campaign is only ever as good as the data being used.

Does it make sense to continually send out information to your clients’ email addresses if those addresses are wrong and you simply receive countless bounce backs? In a worst case scenario, would you want to cause the upset, embarrassment and insult of writing to a deceased client? Of course not.

So, why not start by reviewing the database and ‘tidying up’ that incorrect information – whether it be a name/address/email change it will help the practice’s communication effectiveness if you can be sure that such information is up to date. We should not underestimate the power of a clean client database particularly in its ability to drive ongoing turnover and profitability.

Payments

Talking of the financials, practice owners should turn their attention to the payments they receive and those that they make. Firstly, it is always sound advice to review the debtors to the business regularly, and to make sure that the collection of cash process is working well. Look at the payments you have received in the first part of the year from both providers and clients – are you receiving them on a timely basis or are terms being breached regularly?

If the latter, then now is the time to firm up that process – money owed to you could be earning interest in your account rather than someone else’s. Also, regularly review your outgoings particularly for all ongoing services – are you getting value for money from them and/or could you renegotiate or change providers in order to get the same or more for less?