My sort of swimming pool
I am not a great swimmer. I can manage quite well in reasonably calm water, but I don’t like to get out of my depth unless in a swimming pool with a lifeguard watching on.
In business I try to stick to what I know. I know a lot about tax. I know a lot about running a business. After all I have been running several for quite a long time. I cannot claim to be a specialist in every business skill or indeed in very many. In business advice I am rather like the family doctor. I can make simple diagnoses and prescribe treatment, but anything complicated I refer to a specialist. That is what my business advisory offerings are about: understanding the needs of a business and finding the right person or people to satisfy that need and help the business grow.
We can’t do everything ourselves. That is why I subcontract non-tax work out from my tax business because I cannot keep up with the latest requirements in the accountancy world, and it is not cost-effective to do bookkeeping. I specialise and am good at what I do. I don’t want to be a Jack of All Trades and Master of None.
It is a big risk to try to do something for which you lack the expertise. You can get things wrong as a financial adviser did recently doing the tax return of a client I have just acquired. The risk can be a quite serious financial one whether it is about money matters such as tax or driving a fork-lift truck you are not trained for. Worst of all, if something does go wrong you and even if you are insured for public or professional liability, your insurers might not pay up if the mishap occurred while you were doing something you shouldn’t have been doing. You might lose the business and even your house when you get sued.
Just occasionally I have been offered business which was potentially well within my expertise but the financial risk was to great simply because of the size of the businesses and the large amounts of money involved. It has pained me to do so but I have passed that business on to larger firms with bigger insurance policies and which I believe will do a good job, though perhaps for a commission.
It is easy to be tempted to get out of our depth by a large fee or just by a desire to be help. We don’t want to find ourselves drowning though, do we? Have you ever bitten off more than you can chew?
Great article! Succinct and precise. My best business advice ever is to play in what you know, if you desire to play somewhere else, seek the knowledge.