Value added services are attractive to accounting practice principals because:
- The work is stimulating, interesting and challenging. Much of the work is like an intellectual puzzle where the accountant has the question or problem, and then needs to find the answer or solution. For example, how does a retail store increase sales and profitability by 50%? The possible answer is implementing the Flight Centre employee store ownership model whereby the store manager can buy up to 35% of the store. When this is done these stores produce 50% more profit than ‘standard’ stores.
- Can be highly profitable. The fee for the service is based on a percentage of the value added to the client or a fixed fee, not the time taken on the job. This can mean effective hourly rates of $500, $1,000, or $5,000.
- Low competition at this stage as very few practices are actually offering value added services. In the accounting profession there is a lot of talk about the service, a lot of accounting signs saying business advisory services available, but limited actual provision of the service for a fee.
- Opportunity to build a business only servicing a niche value added service. This specialisation allows the building up of exceptional skills in this niche area, with the corresponding exceptional income opportunities. Just think of the income of a general GP versus a specialist heart surgeon.