The business coaching industry started during the 1970s and grew dramatically during the 1990s. It was simple to become a coach as there are limited barriers to entry, and coaching is rapidly spreading across all facets of our lifestyles.
Accountants should create or grow advisory/business coaching
My concern is with business coaching – why are so many accountants in practice loath to grow advisory when they have all the expertise to make this a very successful and lucrative part of their practices? The size of the market is substantial and is expected to grow to US$6,25 billion in 2024. It is estimated that in 2023 there were over 77 000 business coaches in the United States alone.
Many of the business coaches outside of accounting include personal growth as part of their service, which I am sure plays a big role in their attraction to clients. This is something that can be learned and included as part of the business coaching package. Accountants should be the best business coaches for the following reasons:
- They are trained to comprehensively understand and compile financial statements and their nuances
- They are in the best position to explain to their clients the full story of what their business is telling them, and
- They can highlight problem areas and recognise opportunities
On top of this, the business owner is already a client and in most cases a relationship has already been built.
It should be noted that the Big 4 accounting firms clearly recognise the potential of coaching and consulting and as a result have built up very large advisory practices. I have established that many accountants in practice involve themselves heavily in the accounting and tax functions for their clients and thus claim to have little time for advisory. But this should be a warning: traditional accounting functions are likely to be impacted by the growing influence of AI and accountants need to recognise this and grasp the advisory opportunity. Advisory is generally more lucrative than core functions and serves to truly build strong relationships, as the trusted accountant is promoted to trusted advisor.
Even more reason for accountants to take on advisory or business coaching is set out in an article by Luke Fraser in Businesstech (dated 25 April 2024) where it is pointed out that 138 businesses were liquidated in March 2024, with a warning that there are more to come. Businesses are facing great difficulties due to 15-year-high interest rates and ineffective ports and transport, as well as political uncertainties. The article states that for these 138 businesses, failure was mainly due to poor board governance, lack of cash management, and weak financial controls.
Now, who better to be advising these businesses than their accountants, as these three areas of failure are bread and butter for skilled accountants who are trained and possess the proper qualifications and business know-how to be effective advisors or business coaches.
So, this is a call to get out there and provide our clients with the support accountants have the true expertise to provide.
AUTHOR Jon Harding CA(SA), Owner, FinGenie