World domination isn’t a modest goal by any means but it is one with rather high potential returns. What’s more, as accountancy franchise TaxAssist Accountants is proving, with a sensible approach – in this case, starting small and aiming high – it is more than achievable.
TaxAssist exists purely to look after the accounting needs of small businesses and it all began in 1995 when founder John Westgarth saw a gap in the market. His eureka moment came when he realised small businesses weren’t traditionally well looked after in the arena. “In accountancy you’ve got your one-man bands working at the kitchen table without access to the right resources. Then you’ve got the three-four partner firms that tend to send out the trainees to look after small businesses. And finally there are the bigger firms that don’t really want to work with small business clients because they can’t charge enough,” says David Paulson, senior manager of international franchising at TaxAssist. “So John set up a national network looking after small businesses, which operated purely as a franchise from day one.”
The company now has 195 franchisees that collectively look after 54,000 small business clients globally and has annual billings last year of £35m. It is the largest network of accountants specialising in servicing small businesses in the UK. Westgarth may have sold his stake in a management buyout in September of last year – in a rather unique deal that saw 32% of the company now owned by franchisees themselves and 53% by senior management – but the work he started looks long set to continue.
TaxAssist’s overseas ventures began a stone’s throw away in February 2009. “We launched a master franchise in Ireland as the testbed and we treated them as if they were 3,000 miles away,” says Paulson. “We got on the plane every week as we would for the Canadians further down the line.””
Ireland was the natural choice for such a litmus test. It’s close enough that Paulson and his team could nip over to help with anything. They also speak the language and, culturally-speaking, Ireland is similar enough that it’s within TaxAssist’s comfort zone.
With a recession on both sides of the Irish Sea, 2009 was was a difficult year for expansion. “Despite the odds, the Irish master franchisee now has 26 franchisees in their network and growth is very strong,” says Paulson. So strong, in fact, that the Irish are now looking to expand TaxAssist into Scandinavia and northern Europe. “In Ireland, they now have more than enough resources to support themselves and they want to carry on developing the franchise side so we’re now looking to do a joint venture and we’re very excited about it.”
From there the plan is to take it slowly, before eventually moving into France and Germany, which have much larger populations. “We’ve really got to be ready for it when the time comes, so going to Sweden first, for instance, with its population of nine million, is more of a gradual roll-out.”
In the meantime, TaxAssist has its work cut out in Canada and Australia, which is where the focus has been for the last year. “They’re part of the Commonwealth so we have a natural affiliation there,” says Paulson. “We’ve got to work in areas with a strong tax system; it’s not strong enough in the Middle East or in the weaker economies of Europe, which just aren’t viable at the moment but could be in the future.” Australia and Canada have both weathered the global recession very well and have very strong economies and banking systems. But, more importantly, they’re countries with a lot of small businesses that need their tax returns filed and accounts done. “We know there’s a large demand for our services as there are no national brands doing exactly what we do.””
In Canada, rather than going nation-wide, TaxAssist is working on a regional master franchise basis. “We’ve broken it down by provinces with populations of around four million and up,” explains Paulson. “Over the last 12 months we’ve been training a master franchisee who will be responsible for the greater area of Ontario – a territory of six million – which allows her a network of around 50 to 60 franchisees.””
Adapting to the law in a different country is always a challenge, especially when it comes to finance. “It’s been a long process over the last 12 months making adjustments to all our materials for the Canadian market,” says Paulson. “If we just went with everything written how we’ve got it here in the UK, we’d be entering that market as a UK company; what we want to do is enter that market with the feel of a Canadian company so we’ve adjusted our branding to suit the Canadian market because that all goes down better when it comes to recruiting actual franchisees on a local level.”
TaxAssist is a full member of the Canadian Franchise Association “- not to mention the British Franchise Association and the Franchise Council of Australia – which also helps when recruiting. “These organisations can facilitate introductions for us, which really helps to fast-track things,” says Paulson. With the help of UKTI and BIS, TaxAssist was also able to conduct market research in all their target countries through local embassies. “That’s been a very good market reference tool,” Paulson adds.”
The level of talent in Canada, as in Australia, is superb. “In terms of professional services and chartered accountants, there’s lots of them out there who have had very good careers and are looking to make that move now into being self-employed.” With the level of talent being so high, it can be a real challenge actually deciding who to work with.”
“In Canada we went with someone with a very strong business background who is used to managing large enterprises,” says Paulson. “The thought there is that we’d have someone with the management skills and expertise to look after the network of franchisees. It is quite a unique thing managing that franchisee-franchisor relationship, so we needed someone who has that mentoring and coaching experience so they can really advise those franchisees on that local level.””
In Australia, TaxAssist has taken a bit of a different approach. “We’ve actually taken a firm of accountants that’s got six branches already,” says Paulson. “We’re going to convert those six branches to a TaxAssist and they’ll hit the ground running and start recruiting franchisees. Moving forward, it would be our preference to take on a small firm that has already got an established shop, store or regional commercial property and convert them to TaxAssist before they become the franchisor.””
They’ll have the local tax knowledge and TaxAssist will train them to be the franchisor.
Of course, when looking for franchisees and going to franchise fairs abroad, it certainly helps that TaxAssist has some industry awards under its belt, not just for franchising but for accounting as well. Among other awards, it received the Franchise of the Year award back in 2010 and has been nominated again for the award this year. “Things like that really help rubber stamp us as a brand.”
So what does the future hold for TaxAssist? First and foremost is growth at home, where it hopes to grow its base of 200 UK franchises to 300. It then wants to establish more master franchises in Canada, which it hopes will act as a launch pad for business into the US, which will be its biggest challenge and market yet. “”Worldwide, we want to grow to 20 regional franchisees, each of those looking after 50-60 franchisees within their territory,” says Paulson. “In short, global domination is what we want.””