Complacency - A Good Way To Go Broke

Accountant's Minute 181

When you hear of new, innovative ideas in the world of accounting, is your first reaction to say “Oh well, my clients wouldn’t be interested in that”?

Do you really know your clients as well as you think you do?

It’s a fair question for everybody in business.

For accountants and other professional advisors, who know some of their clients’ more intimate secrets, it’s even more important.

If you start second guessing what’s good and what’s not for your clients right off the top of your head, you may be doing them a gross disservice.

Often, we get so complacent doing the same thing for our clients year in year and year out, and billing them their regular annual fees, that we don’t stand back and see what new developments are coming along that may be of real benefit to them.

Instead, we put up barriers and keep believing that what we’ve always been doing for those clients will just keep on going, so why ‘rock the boat’.

Well, that’s OK, until someone else gets in their ear about some new development.

Perhaps it’s on the internet, or maybe the concept gets raised when meeting another businessperson at a cocktail party or a barbeque, and your client starts to ask themselves “Am I getting everything I should be getting from my accountant?”

How do you make sure that your clients are always going to leave you on their speed-dial?

It’s no secret in the world of accountancy that there’s very little growth left in tax compliance work.

That’s why proactive accountants have now worked out that, for their practices to stay ahead of the pack in recruiting and retaining clients, they have to become more than just ‘the folks who do our tax every year’.

They know to succeed they have to become ‘trusted advisors’ and business consultants to their clients, because that’s where there’s future growth in accounting.

To get yourself into that position means you have to get to know everything about your client and all the ins-and-outs of their business.

The days of simply putting their financials together are quickly disappearing.

You have to become totally familiar with every aspect of their operations, who their clients are, what their staff do, what their expansion plans are and what they’re going to need to achieve their goals.

Yep, that’s a long way from just being a tax accountant!

However, taking the time to build this intimate relationship can produce enormous benefits.

By making yourself almost indispensable to your clients, you’ll begin to generate premium fees.

Clients don’t mind paying premium fees, if they believe they’re getting the right advice that is helping them achieve what they want.

Let’s do a quick assessment to see if being a ‘Trusted Advisor’ is right for you.

Do many of your small or medium-sized clients have bank loans?

Of course, they do.

These days, most SMEs couldn’t function without loans, leases and overdrafts and no doubt, all of them backed up by personal guarantees.

The bank loans and leases will have monthly commitments that dig into the company’s cashflow.

… and, those personal guarantees will be hanging over their heads.

They’ve probably been provided by your client, who we’ll call Client #1, or maybe, by the company’s other directors, wives or husbands, family members, possibly friends; could even be the client’s mother-in-law.

Banks love to hold guarantees until you no longer owe them money, but a time will come when those guarantors will want to get them released for one reason or another.

When it comes to releasing guarantees early, we know banks aren’t all that accommodating.

Now take this second client scenario.

Perhaps, Client #2 and his wife have been 30 years in the business and now want to retire, but they’re going to need to get money out of the business they’ve built, if they’re going to have any sort of comfortable lifestyle.

OK. Here’s the final scenario.

Client #3 is still relatively young and is full steam ahead with their business, looking to expand by buying out a competitor or building a new factory.

Now, as their ‘trusted advisor’, how would you help each of them solve their respective funding problems?

Well, before you answer, there is now a possible solution that could solve many of your small and medium-sized clients’ capital raising needs.

It’s called Crowd Sourced Funding Equity Raising.

You may have seen me talking about it in videos recently, because it became legal in Australia as from 19 October 2018.  All my recent videos can be accessed from:

This equity-raising concept was devised about 10 years ago and quickly adopted in the United States, Canada and the U.K., to give SMEs the opportunity to raise capital from the public, in a similar way to public companies.

This has helped to ‘level the SME playing field’, because it meant that, in those original countries, small and medium-sized companies were no longer entirely at the mercy of their banks, when it came to securing capital.

Following Crowd Source Funding Equity Raising’s initial success, New Zealand jumped on the bandwagon a couple of years ago, but Australia remained on the sidelines.

Now, following two years of negotiations between business groups and the Federal government, legislation has passed through Parliament and is now Law.

Crowd Sourced Funding Equity Raising may have a similar sounding name, but should not be confused with ‘crowd-funding’ operations, like GoFundMe.

‘Crowd-funding’ is often used to raise money for charitable causes on social media, but more than a few people have tried to scam that process.

Crowd Sourced Funding Equity Raising is completely legitimate.

Its government-regulated capital-raising for Australia’s small and medium-sized businesses and it operates under the control of ASIC.

The corporate regulator has licensed seven financial companies as ‘Intermediaries’.

Under this legislation, SMEs themselves can’t go out and directly raise money from members of the public.

Instead, what will happen is that your client will appoint one of these Intermediaries to work on their behalf your client, to raise the required capital from the Intermediary’s pool of retail investors.

They’ll do this by publishing your client’s Offer Document on their website.

One of these Intermediaries claims to already have over 35,000 retail investors on their books, so they appear to be starting from a solid position.

To qualify for Crowd Sourced Funding Equity Raising, your small and medium-sized business clients must have an annual group turnover of less than $25-million, group assets of less than $25 million and not be listed on a Stock Exchange or a Financial Market.

This is called ‘the legal tests’.

If they pass the legal tests, they can raise up to $5 million each year.

To do that of course, they must issue shares in their company.

As part of the legislation’s in-built protections, retail investors are only allowed to invest $10,000 in any single company in a given year.

Simple maths tells us that to raise $5 million on that basis would require a minimum of 500 shareholders, so I can hear you asking “how’s that possible when most SME companies are limited to 50 shareholders?”

That’s a good point, but they’ve thought about that and the new legislation allows for an unlimited number of retail investor shareholders.

Click here to see how shareholding provisions have been taken care of.

One of the great benefits of this new legislation is that your qualifying SME clients can raise funds for any legitimate business reason.

Certainly, this covers all the needs of those three client scenarios we looked at earlier, such as, issuing shares to raise capital to:

  • retire bank loans and release guarantees;
  • payout an owner/operator on retirement; and
  • fund acquisitions and company growth.

All of these needs fall within the provisions of the Crowd Sourced Funding Equity Raising legislation.

Just to make things absolutely clear, my company, ESS BIZTOOLS, is not an Intermediary; we’re not licensed to raise money.  Our role is to make your role easier and save you time.

For the past 12 months, my team and I have been researching the provisions of the Equity Raising legislation and we’ve developed reports, designed to save you hours of work in coming to grips with all the relevant details, so you can properly advise your clients.

A lot of overview material is provided free-of-charge on our website -

However, there’s also a suite of more comprehensive information and pro-forma documents to help you through the entire process of:-

  • assessing potential clients;
  • briefing your clients on the pros and cons as they relate to their companies;
  • becoming fully aware of how the Equity Raising process works;
  • properly advising your clients on the best course of action open to them;
  • preparing a client’s company for valuation and capital raising;
  • selecting and working with the right Intermediary for you and your client; and
  • compiling and lodging the Offer Document.

All this is contained within the ESS BIZTOOLS' Crowd Sourced Funding Equity Raising Product Package, (Learn More) which has been specifically written for professional advisors.

This package is backed by our 60 Day Money Back Guarantee and License Agreement.

One of the documents in the package, that I think you’ll find particularly helpful is our Crowd Sourced Funding Eligibility Matrix. (Click here

This tool will help you to make a quick assessment of the specific benefits that may affect your individual clients, whose companies have qualified under the legal test.

You know, we accountants are typically a conservative breed and, in the past, we haven’t really been proactive in taking new ideas to our clients.

However, we are now faced with a rapidly-changing business world.

If you want to become and remain your clients’ ‘trusted advisor’ you’re going to have to get out, on the front foot, and advise, not wait for your clients to discover new concepts for themselves by accident.

In these days of short-lived loyalties, your clients will eventually hear about concepts, like Crowd Sourced Funding Equity Raising.

If they haven’t heard about it from you, they’re just as likely to take all that work to one of your more proactive competitors.

Next thing you know, all their annual tax work has been moved over too and you’re left out in the cold!

It’s a dangerous course not to stay abreast of financial world developments and start taking new ideas to your clients.

Clients love the idea that they’re thought of as important enough for their advisors to keep their best interests ‘top of mind’.

At ESS BIZTOOLS, we understand that you simply don’t have the time to thoroughly research every new development that comes along.

That’s why we’ve done that research on Crowd Sourced Funding Equity Raising for you and put all that information in one place.  That research is available here. 

Utilising Crowd Sourced Funding Equity Raising may be the right solution for a number of your small/medium-sized clients this financial year and maybe, for many more of them, as the years go by.

Developing a reputation as being a specialist in Crowd Sourced Funding Equity Raising could give you and your accountancy practice substantial new revenue streams.

To get to the point of funding, a company needs to have prepared:

  • Business Plans;
  • Projected Cashflows;
  • Valuations; and
  • an Offer Document

Preparing these documents will require services provided by your practice.

The average accountancy fees for raising capital through this process have been estimated at around $40,000.

… and your role with each company will be ongoing, with annual filings, distributions and reports to shareholders and potentially a virtual Chief Financial Officer service.

Click here for a list of the most likely services you’ll need to provide and the estimated fees.

If you want to take the step from simple tax agent to your clients’ business consultant and ‘trusted advisor’, Crowd Sourced Funding Equity Raising may provide an excellent starting point for you to begin those conversation with a number of your key SME clients.

We are offering a Christmas discount for a subscription to the Crowd Sourced Funding Equity Raising Product Package, normally priced at $999 (incl GST) – reduced by 40% to $599 (incl GST).  This offer is available until close of business on Friday, 21st December 2018.  Please (click here) to subscribe, entering the discount code CSFC40 at checkout to obtain your discount. 

Alternatively, you could subscribe to the ESS BIZTOOLS' Gold Package which includes the Crowd Sourced Funding Equity Raising Product Package and 22 other product packages and other products to assist with the delivery of business advisory services to your clients.  This package is normally priced at $2,970 (incl GST) but has been reduced by 40% for the Christmas promotion to $1,782 (incl GST).  This offer is available until close of business on Friday, 21st December 2018.  Please (click here) to subscribe, entering the discount code GOLDC40 at checkout to obtain your discount. 

Once you’ve looked through our website,, if you’d like to discuss any aspect of Crowd Sourced Funding Equity Raising further, please give me a call on 1800 232 088.

Have a great day!

Do You Want More?

To gain an overview of what is included in the ESS BIZTOOLS’ icon goldGold Package. Please contact us for further information.

To download free material click the link below:-

Download this Week's Free Report

Watch out for the next episode of "Accountant's Minute" or subscribe to the podcast on iTunes for more news, ideas and tips on providing outstanding non-compliance services to SME clients.

Podcast Accountant's Minute

Episode 181 - Complacency - A Good Way To Go Broke

Latest business advisory news for Accountants in under a minute.

As their trusted advisor, can you assist your SME clients with business advisory services?

Download Podcast in iTunes

Complacency - A Good Way To Go Broke

Affiliates Wanted

Become an affiliate and earn additional income.
ESS BIZTOOLS is conducting a series of product campaigns for sales of products/services to accountancy businesses, business consultants, advisers and bookkeeping businesses.
We are happy to extend an invitation to an affiliate to participate as a supplier of services in promotions to our subscribers. If you are interested in this, could you please contact us?
We have launched the ESS Small Business website which is primarily targeted at small/medium companies and enterprises as well as not-for-profits, charities, sporting and social organisations.

Contact Details

12 Eclipse Street, ROWES BAY, QLD 4810
(07) 4724 1118
Toll Free: 1800 232 088

Latest Accountant's Minute

  • Impact of COVID-19 and Financing  of Businesses
  • It's Accountants' Time to Shine
  • Communicate, Communicate, Communicate - Andrew Geddes
Cron Job Starts