“The voice of the forgotten middle is starting to be heard” says medium business guru, Mike Rich. 5,000 advisors, mostly from bigger accounting firms, took up his recent LinkedIn offer to receive free checklists and guides that target medium business clients – typically $2m to $100m in revenue / 10 to 1,000 staff. For a more detailed discussion listen to this 20 minute podcast: https://smeradio.com.au/mmm-episode-one/
For years we have forgotten about medium businesses. Our use of the term SME is erroneous – it did mean small and micro enterprises. Today we lump medium businesses into it when they are more like large businesses in every respect but lack their resources. But they are easy to recognise – typically amongst your best clients where fees are higher and advisors can play a key role.
Commentators focus on physical rather than economic numbers. There are over 2.2 million businesses across AU and NZ. 95% are small – just 5% are medium or large. Despite this imbalance, each sector provides about a third of all revenue and jobs. Parliament at all levels and advisors have been focusing on just a third of the economy. This is especially serious for regional areas.
Small is not where the growth is. A survey across 20 countries has medium businesses outgrowing small by a factor of 10. They are also amongst the lowest users of new technology as few advisors understand the medium business space. Despite punching well above their weight, 90% say they face barriers to reaching their full potential. The top six are: cash flow, succession, sales growth, digital technology and affordable advice.
Over 70% favour hybrid systems and local support. While small businesses may put everything in the cloud, over 70% of medium and large businesses favour hybrid systems – on premise with some cloud. It increases success and reduces risk, plus they don’t like multiple software vendors nor their data on multiple servers across the Internet. They want fast, reliable, feature rich systems that will scale for 10 years or more – with ‘one-throat-to-choke’ locally managed data and support services.
When it comes to software, smaller accounting firms may promote small cloud systems that integrate with their practice management software. On the other hand, medium business systems can help reduce the six barriers making them easy to justify – especially for wholesalers and distributors currently using old desktop systems.
Almost all bigger accounting firms are agnostic – they work with the software systems their medium and large clients have or best suits their needs. There is a lot more at stake so PI considerations also favour this approach. They do appreciate generic checklists and guides for both staff education and appropriate clients, but don’t go beyond that. So let’s look at what’s available right now.
‘Single Touch Payroll’ in AU and ‘Payday Filing’ in NZ are both mandatory software upgrades. This guide helps clients decide if they fit small or medium software, plus provides access to free checklists and demos that will assist them regardless of what payroll software they might use.
New payroll reporting is also a rare chance for medium business clients to also improve their sales, stock and debtors. This guide contains over 120 tactics. Click on this link if you’d like a copy when released in the next few weeks. Simply join me and over 5,000 medium business followers on LinkedIn.
Mike Rich, is co-author of the guides, plus co-founder of Attaché Software and the NFP M-Institute which have spent over $2m on research into the medium business sector including the role of accounting firms and other advisors. He recently received Australian Business Leader of the Year Award. He is a software start-up veteran and accountant from Victoria University in Wellington, NZ. His contact details are in his LinkedIn profile.
Latest posts by Mike Rich (see all)
- Advisory focus should be on medium business clients - October 22, 2018
- Why 5,000 advisors said they’d like to help their medium business clients more - August 21, 2018
- Single Touch Payroll–a good solution to this problem - May 6, 2018