As The Corporate Finance Network announces that the third accountancy firm in a month has joined their national network, their Founder and Chairman, Kirsty McGregor, shares her view of the market.

The deal flow for SMEs continues to grow during 2022 and I see no sign of that abating over the next eighteen months, at least. All of our member firms are reporting that their pipeline is strong and an increasing number of founders are approaching their advisers to discuss their exit plans or, conversely, how they wish to grow faster, which often includes a strategy of acquiring another company.

In 2005, when I founded The CFN, the market demographics of business owners told me that this was always going to happen.  We had an aging population of founders, which was peaking due to the growth in business start-ups as a result of policies in the 1980s under the Thatcher governments, so it was a fact of life that those owners had to retire or exit eventually.

Little did I realise then that it was going to be the impact of trading through a global pandemic which finally tipped them into these actions in such large numbers, as many in that category had proven personally resilient and entrepreneurial enough over the subsequent fifteen years to continue running their companies, way beyond what would have been their expected retirement dates.

The accountancy market has also seen a shift in expanded skills and a more commercial service offering over that time, so that firms who I would never have expected to be willing or able to offer corporate finance advice when I founded The CFN, are now more than capable and very keen to develop these services for their SME client base.

It is no surprise therefore that within the past 4 weeks we have welcomed two large regional firms to our network as well as the practice of a very well-known accountant in our sector.

Bevan Buckland and Williams Duncan + Co are the largest independent players in their respective regions of South Wales and West of Scotland, with over 200 years of trading history between them.   Both firms have adapted their services over the years and now recognise that corporate finance is an essential area for them to provide specialised advice so that they can continue to be market leaders in their regions.

Greenstones is the innovative practice led by Simon Chaplin, also known as the Accountants’ Mastermind.  Simon has joined other newer firms in The CFN, who are already offering a well-rounded proactive service to their clients and have realised that corporate finance is an essential part of that advisory matrix.

My goal when I started The CFN was that more clients would have access to brilliant advice around growth by acquisition and ultimately the disposal of their business and that firms across the UK would have the necessary expertise to offer that service.  It may have taken more than 15 years but as our products are now being accessed by tens of thousands of business owners, I feel that we are finally beginning to achieve that aim.

The Managing Partner of one of our firms contacted me last week and recounted how he had just led a powerful exit planning session with one of his long-standing clients.  The business owner had been incredibly emotional as, unbeknown to my firm, had been feeling trapped in his business and knew he needed to exit in order to give more time back to his family.  This session led to a detailed action plan where he realised that there was a light at the end of the tunnel and this gave him renewed energy to see it through and prepare his business for sale so that he could ultimately exit successfully.

Those stories fill me with pride that the services we offer make a huge difference to people’s lives.  Whilst I personally don’t interact with those clients directly myself now, it brings me joy when those stories are shared with me.  Occasionally, I do hear from those business owners, such as the founder who exited successfully enough to buy his own yacht and semi-retire, and then had taken on some non-executive directorships, and now wanted me to introduce him to a member firm in another part of the country where one of his clients were based, so that they too could benefit from excellent corporate finance advice.

When we know that lack of capacity is a huge challenge for most firms, efficiency is paramount and our practical tools, training and corporate intelligence resources allow our firms to delegate this work to those outside the most senior leaders in the practice, and to ensure that it’s carried out effectively.

Corporate finance used to be the elite part of the accountancy market and only carried out by the most experienced senior leaders and, usually therefore, only accessed by a select number of clients due to time constraints and the lack of any systemised pipeline nurturing or continual business development.  Our products allow our firms to offer more structured marketing and corporate finance advice to all of their clients, so that more can be prepared for sale and many more can consider buying a business.

We cannot stop our clients from exiting their business, nor should we try to.  Rather, we should encourage them to plan so that they ensure they are sellable and that company can continue to be an employer and brand in the local community for the next generation.  Our SMEs are typically not acquisitive, so there is a huge opportunity to educate more ambitious and capable business owners about this as an option too.

The certainly future looks very bright for those accountancy firms who recognise that by growing their corporate finance offering, they can bring more success to their local community and with it, the continued successful development of their own practices.

For more information about joining The CFN email and for details of recent deals completed and businesses for sale and wanted, visit here for our latest newsletter, “Network Opportunities”.

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