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Lord Sugar on small businesses – and their accountants

Following Pauline’s recent blog about trust in accountants being higher than ever with SMEs (here), it was interesting to read what Alan Sugar had to say  in a magazine article about SMEs and how he thinks accountants can help them. Here’s a brief summary of the main points:

In Lord Sugar’s opinion, the recession should not make any difference to the timing of a new business launch. The decision whether or not to start a business should be based on sound business principles (supply and demand, financing needs etc.) regardless.

  • His best bit of advice to start-ups was to keep a constant eye on the business and basic numbers, e.g. money in and out. Don’t get too bogged down in detail.
  • The main mistake Lord Sugar sees small businesses making is getting stuck in a rut and not taking a step back to look at things strategically on a regular basis.
  • His view of the credit crunch is that business finance is not as hard to find as most people suggest. If you are refused credit by your bank, take it as a warning that your business plan/model may not be good enough.
  • When asked if he thought accountants made a positive contribution to small business and enterprise, Lord Sugar agreed with Sage’s survey that accountants are likely to be the first place business owners turn to for advice, in particular to help them take a step back and look at things strategically. Helping in dealings with the banks is another key area, e.g. interpreting their guidelines on lending.
  • As for what makes a good accountant, Lord Sugar said that the best accountants are the ones that take an interest in their clients’ business and do more than just number crunching. He adds that many clients would appreciate a simple explanation of measures like debtor days and solvency ratios so that it makes it easier to understand what is happening in the business. The full text of the article is here .

I am not sure my experience of the banks is the same as Lord Sugar’s, but I completely agree that accountants must do more than just the number crunching to help their clients. At the same time there must be a willingness on the clients part to recognise the value of that advice and, of course, pay for it.

Please tell me what you think.

3 Responses to “Lord Sugar on small businesses – and their accountants”

  1. Andy Hunt says:

    Lord Sugar your fired….

  2. Steve Mills says:

    Great advice from Sir Alan. I find so many businesses who are not succeeding to the level they could because they get so involved in doing the work of the business.

    WeLL done to k&h for bringing this to the attention of small business owners. Outstanding advice!

    Steve

  3. I do not agree with Lord Sugar that if the bank say no it means you should question the business. The banks are not there to supply start-up capital so expect a No. Sahar Hashemi, co-founder of Coffee Republic, heard No 19 times before one bank manager said Yes.

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