EQ counts on growth amid recession

Published on Tuesday 2 June 2009 21:42

THEY say that the only people to win during a recession are the accountants and the lawyers.

As more companies fall into the hands of administrators and liquidators, it's left to the professionals to pick up the pieces and then file their hefty bills.

But EQ Accountants in Dundee is bucking the trend – by growing its business but without undertaking corporate recovery work.

The firm – which specialises in taxation, agriculture and corporate finance – grew its turnover by 9 per cent in the year to 31 March, building on the 12.5 per cent rise posted in its previous financial year.

And the secret to EQ's success? According to managing partner David Cameron it is simple: growing business the old-fashioned way, by winning clients and hiring the right staff.

The practice was formed in September 2004 following the merger of Dundee-based firms Reeves & Neylan and JLM.

Cameron was with Reeves & Neylan for 17 years and has led the new firm as managing partner since its inception.

"I think our revenue growth is partly due to the position we've managed to achieve since the merger," explains Cameron.

"Any business merger is going to be a difficult and challenging time and, with the best will in the world, the first two years of that process fell very much in that category."

He adds: "But really since about January 2007, it's been continual progress as far as we're concerned and we've broken the back of all those challenges.

"I think that's what stops a lot of people from merging – they can't be bothered with the first two years of hassle. We were courageous enough to take on that challenge and we continue to reap the rewards."

Cameron believes those rewards include the ability to attract a high calibre of staff and to stop existing talent leaking away to bigger accountancy firms.

"Both practices prior to the merger were among a group in Tayside that didn't really stand out from the others," remembers Cameron. "We found it difficult to compete with the larger firms or the big four.

"A business like ours lives and dies by the quality of the people it employs. The merger gave us the opportunity to change the profile of our practice – it meant we were either first or second choice for graduates and for experienced accountants too."

While revenue may still be on the rise, EQ is being realistic about its current recruitment. After taking on seven graduates last year – a record for the firm – only four trainees will be joining the practice this year.

With 75 staff already spread across three offices in Dundee, Forfar and Perth, Cameron thinks he is unlikely to take on more in the short term.

"We're in the same position as every other business out there, which is there's still a degree of uncertainty in the market," Cameron admits.

"Outwith our recruitment of our graduate intake, which we committed to in November last year, I can't see us looking to increase the number of staff in the short term.

"If we could see the green shoots of recovery were starting to appear then we'd take a different view but my gut feeling is that we'll be well through 2009 and into 2010 before perhaps we're in that position."

As well as bringing in new recruits, EQ is still promoting staff from within its ranks, including making seven management promotions in April.

Relying on the practice's specialities – particularly taxation and agriculture – has been a cornerstone of the firm's growth. Cameron believes that a lot of the new business the firm has won has come as a direct result of recommendations from existing clients.

"There's no better source – if a client's happy and is willing to tell other people he's happy then that's a great commendation," says Cameron.

He is also keen to promote experts within the firm: Forfar-based partner Keith Hopkins is tomorrow delivering a course on behalf of the Institute of Chartered Accountants to teach his fellow professionals about how they can help farmers.

Cameron believes such activity promotes the firm and has added to its growth.

EQ has increased its efficiency by getting what Cameron calls a "greater level of output" from staff since the merger. But continuing to grow the business is still on his mind.

"We've set a budget that's targeting us to achieve some growth in the year ahead but not at the same level as over the past two years," Cameron says.

"What's important is not allowing yourself to be affected by the general decline in the economy but you set yourself targets that are challenging."

Budgets, prices and decision-making

DAVID Cameron's tips on how to survive the recession.

&#149 Keep adequate financial records and set budgets

The biggest failing I find in businesses of all shapes and sizes is not maintaining adequate financial data to measure the performance of the business. I can think of businesses with turnover of up to 10 million that don't produce monthly accounts and don't have an annual budget that they monitor. In good times, you can get away with it but in tough times it's an absolute necessity.

&#149 Don't lower your prices

Among our clients and competitors, I've seen a move to discount costs. I think that's a very short-term strategy that will provide long-term detriment. Your profits in the short term will be affected and your ability to get customers to increase the price they will pay for your services in the future will be affected.

&#149 Be decisive

The number of businesses that delay or defer difficult decisions and continue to operate in exactly the same fashion because they can't be decisive is significant. If things aren't going well then what's the point of leaving things as they are? You won't get all the decisions right but in amongst the wrong ones there'll be good decisions too.