Brexit is the least of your potential problems. Here are three real issues to worry about.
By Hitendra Patil
Accountaneur: The Entrepreneurial Accountant
The world just changed overnight.
And there are always two distinct ways the human mind works.
- React: What just happened? Google searches for “What is the EU?” spiked!
- Respond: As is the human wont, the most debated question of the moment is “what next?”
- Google searches for ”How to emigrate” spiked too!
Will Brexit become precedence, with far-fetched unimaginable consequences? But, most importantly, how will it affect U.S. accountants?
We all have “our own worlds” – our work, our family, and our communities. Our own “world” gets affected by many situations, instances and yes, exits.
Three distinct exits impact accountants’ own worlds. Here they are:
Cexit: Client Exits. Every business faces clients exiting from their world. But with an accounting practice, exiting clients can have catastrophic impact.
- If you have very few “A” clients, then Cexits of your few "A" clients can be very challenging.
- If most of your revenue is coming from just a few of your clients, then any Cexits can be highly damaging.
- Ironically, if some of your clients are growing too fast, then Cexits are almost guaranteed. The reason: You might not have the resources you need to provide for the emerging needs of such clients.
Texit: Talent Exits. Technology, artificial intelligence, robot software, automation, and whatnot may eliminate some human work. But machines cannot replace human talent. And in a relationship-based business such as accounting, talent is just too critical for success.
- It is not uncommon to hear that Texits from accounting firms also result in Cexits, as clients follow talent.
- Texits also worries other staffers about their future with the firm and cast undue shadows on their thinking.
- Texits always affects service quality, especially in smaller firms.
Pexit: Partner Exits. You can call Pexit a talent exit too. But the exit of a partner to retirement or otherwise can be deeply unsettling for an accounting practice. Succession planning is being discussed as one of the top five challenges facing the profession, precisely due to the magnitude of impact.
- Pexits can dissipate the book of business loyal to such partners. Pexits invariably mean revenue exits and profit exits.
- Pexits also mean experience and knowledge exit. A trained mind is very valuable, and knowledge professions always face tremors of such Pexits.
- Pexits can also cause a huge dent to the reputation of the firm when the partners are highly visible in the marketplace.
The impact of exits cannot be easily fathomed in a complex world. But it is possible to anticipate exit effects in the accounting world and to be proactive about minimizing the impact of such exits. Entrepreneurial thinking can actually prepare you to leverage such exits, converting problems into opportunities.