2 David Gould set up his accounting firm, providing accounting services to small businesses, in 2001. Within three
years his fee income was in excess of ￡100K a year and he had nearly 100 clients most of whom had been gained
through word of mouth. David recognised that these small or micro businesses, typically employing ten or fewer
people, were receiving less than satisfactory service from their current accountants. These accounting firms typically
had between five and ten partners and operated regionally and not nationally. Evidence of poor service included
limited access to their particular accountant, poor response time to clients’ enquiries and failure to identify
opportunities to save clients money. In addition bad advice, lack of interest in business development opportunities for
the client and poor internal communication between the partners and their staff contributed to client dissatisfaction.
David has deliberately kept the costs of the business down by employing three part-time accountants and relying on
his wife to run the office.
David had recently met Ian King who ran a similar sized accounting firm. The personal chemistry between the two
and complementary skills led to a partnership being proposed. Gould and King Associates, subject to securing the
necessary funding, is to be launched in September 2006. David is to focus on the business development side of the
partnership and Ian on the core services provided. Indicative of their creative thinking is David’s conviction that
accounting services are promoted very inadequately with little attempt to communicate with clients using the Internet.
He is also convinced that there are real opportunities for the partnership to move into new areas such as providing
accountancy services for property developers, both at home and abroad. Ian feels that the partnership should set up
its own subsidiary in India, enjoying the benefits of much cheaper accountancy staff and avoiding the costs and
complications of outsourcing their core accounting services. Ian sees fee income growing to ￡2 million in five years’
time.
David has been asked by his bank to provide it with a business plan setting out how the partnership intends to grow
and develop.
Required:
(a) Write a short report for David giving the key features that you consider to be important and that you would
expect to see in the business plan for the Gould and King partnership that David has to present to his bank.
(12 marks)