6 areas clients urgently need your advice

If you’ve ever had a bookkeeping and tax client cheerfully announce they’ve just *finally* found a fractional CFO, you know the pain of the “anchoring” bias firsthand. Why didn’t this client come to you? You offer CFO advisory, after all.

But they don’t mean ill. They are simply anchored on their first impression of you as someone who offers books, not ideas.

To shake off old impressions, you must tell clients about your advisory services multiple times in multiple ways. Otherwise, it can take years for them to realize. That’s why we recommend working your advisory success stories into casual conversation (it’s a refreshing response to, “What’s new with you?”). It’s also a great idea to keep up with events in your client’s industry. Don’t assume they will put two and two together.

In this article, we share six areas in which small business owners are feeling pressure that your advisory may help with. Continue reading below or quick jump to any of the following six areas clients urgently need your advice:

1. The rising cost of everything
2. Tariff-caused supply shocks
3. The skilled-talent shortage
4. Yet more regulation
5. Succession planning
6. Juggling multiple businesses

1. The rising cost of everything

When interest rates hit 9.1% in June of 2022, the country took notice. But small business owners were feeling the effects long before as inventory, services, and labor grew more expensive and gnawed at their margins. Ask your clients. Many feel they have been getting hammered on costs for going on five years now.

“Small businesses run on very small margins,” says Sarah Payne, owner of Denver Concrete Vibrator. “So a 25% increase in any product is going to hurt. And we can’t just raise our prices every time the cost goes up. So we are losing a lot of money.”

Consumers are feeling pain too, which worsens things for businesses. Nationwide costs are up 19% compared to before the pandemic and it’s causing consumers to switch to generic brands and buy used appliances and cars. Egg price spikes are noteworthy enough that USDA’s dry, academic projections for egg prices have become required reading for reporters. All this expense is draining consumers’ savings. The financial services and retirement account provider Vanguard says it saw a record number of “hardship” withdrawals in 2022 and 2023.

This poses a dilemma for small business owners – should they eat the rising costs so as not to lose customers? Or should they pass it along and risk it all? The pain around this is widespread and real: “I can’t absorb the increased cost of a product,” Michael Howard, owner of Howard Family Designs, Warren, Michigan, told The New York Times.

Advisory opportunities:

• Cash flow forecasting – Why do clients sometimes run short on cash?
• Spend management – Why are clients less profitable than they expect?
• Budgeting – How are clients enforcing spend controls?

2. Tariff-caused supply shocks

The U.S. administration’s tariffs on the country’s three largest trading partners have driven up prices for small businesses. Simply the fear of these disputes caused prices to jump as businesses ordered far more inventory just to be safe and now pay added warehousing and finance fees. Those businesses that purchase cross-border supplies from Canada or Mexico were hit particularly hard with those tariffs.

“I’m very concerned. It’s just another tax. We’re getting taxed to death,” said Dennis Percy, general manager of Fred’s Energy, whose trucks pick up energy in Canada and deliver it to customers in Northern Vermont. And, “We saw prices on all materials, including domestic materials, start to increase … we’re talking 75 cents or so on a case of any of our beverages being produced,” said Bill Baburek, owner of an Omaha brewing company called Crescent Moon.

Empirical studies show that U.S. consumers ultimately paid for the last serious tariffs the U.S. imposed on partners in 2018 through higher prices. This is precisely what we’re seeing here.

This may be a useful talking point with business owners: The public often does not realize that it is not the foreign company that pays the tariff, but U.S. businesses that purchase from them. As the Tax Foundation put it, “American businesses will bear the costs of the next trade war.”

Advisory opportunities:

• Scenario planning for the near future
• Market analysis
• Tax advisory

3. The skilled-talent shortage

Business owners are having difficulty hiring people. The job market has tipped back in favor of employers after several reversals over the past half decade but they aren’t finding the people with the right skills at the usual pay levels. Quit rates are half what they were three years ago and there are two million fewer people in the workforce than one might expect, according to the Chamber of Commerce.

Skilled workers are particularly difficult to find. 49% of companies say they must look outside their walls for most of their talent needs and 90% of companies must look outside for advanced technological skills, according to a survey of 1,000 businesses. Manufacturing, construction, hospitality, and leisure are particularly hard hit.

The reasons for this shortage are actually specific to each industry. But things have seemed unstable ever since the pandemic and Great Resignation reshuffled workforces. A record number of people left hospitality and construction for other industries and cannot be lured back.

For business owners, it feels like yet one more kick while they’re down – where even if they can sell new projects or products, they are limited by their ability to fulfill orders.

Hiring, training, and staffing are yet one more time cost they feel they cannot bear.

Advisory opportunities:

• Human capital and pay
• Business insights
• Succession planning

4. Yet more regulation

While the U.S. is one of the top countries to start a business in, it ranks 55th in ease of registering a business – behind the UK, Thailand, and alarmingly, the Democratic Republic of Congo, which is experiencing a civil war. That index is calculated based on the ease of obtaining credit (in which the U.S. ranks well) and dealing with construction permits, procedures and time to register a business, paying taxes, and trading across borders (in which the U.S. does not rank well).

Small business owners feel the grip of regulation. 51% say it hinders their growth and 47% say their business spends too much time fulfilling regulatory compliance requirements.

Small business owners feel that each new regulation antagonizes them further. For example, the new Benefit Ownership Information (BOI) form all owners were told they needed to file with the financial crimes regulator FinCEN, then told they did not need to file, then told they in fact, did need to file – all during the end of year break.

Owners we talk to say they welcome compliance help from their advisors, if it means they can ignore news stories like the BOI form and help them reduce the cost of complying.

Advisory opportunities:

• Compliance
• Preparing financial statements

5. Succession planning

27% of small businesses are owned by a family or couple and one-third do not think succession planning is a priority. Yet succession may be fast approaching for many. 16 million Americans will turn 65 over the next four years and transfer trillions of assets including businesses to a relative or successor.

When owners do not prepare, those businesses are sometimes excessively taxed, fought over, and ruined in the process of transfer.

Business owners we talk to say they simply do not have time to succession plan nor follow the news around its tax implications. Few know that the U.S. Supreme Court recently closed an estate tax loophole that allowed multi-owner businesses to use life insurance policies to fund purchasing the deceased member’s shares. The small business in the court case lost, resulting in $900,000 owed in estate taxes.

Business owners are thinking about their immediate needs and the next few months. They could use help from advisors thinking a few years out on their behalf.

Advisory opportunities:

• Succession planning
• Tax advisory
• Human capital

6. Juggling multiple businesses

There are far more people applying to incorporate a business since the pandemic but not meaningfully more business owners. What is going on? More people are starting a second or third business.

These multi-hustles can range from hobbies like selling baseball cards on up to truly working multiple jobs at once, and it’s making those individuals’ financial, accounting, and tax situations far more difficult.

Traditionally, accounting firms may have offered a personal income tax return option along with a business owner’s C-Corp tax returns. But now, those needs have grown complex enough that it makes sense for firms to offer advisory to help rationalize all those entities. For example, must they separate all businesses? What type of entity serves them best? How can those owners value each of their businesses when each has different owners?

And how does an individual filing jointly do so given their spouse also has several businesses?

Advisory opportunities:

• Business planning and structure
• Fractional CFO
• Controller

Let your clients know all the places you help

In this year’s State of the Industry Report, 73% of accounting practices reported growing profits while just 56% reported growing client lists. This suggests a meaningful number billed more per client.

Many of those respondents say the key to their profit growth was high-margin services like advisory. It’s both an opportunity to grow your practice and help your clients through a difficult time.

But you can only help those businesses if they know what’s offered! If your clients are “anchored” on you doing books and tax preparation, one of the best things you can do is to tell them about the topics you are currently advising other businesses on – or like topics on this list, aren’t yet, but could.

Make this a habit and work it into everyday client conversations to grow your advisory practice, and help your clients equally succeed.

Bonus idea: If you found the above list useful, consider setting up Google News alerts for these topics.