New figures suggest the bigger your business, the less profitable it is likely to be. But why? And how big (or small) should a firm be to maximise profits? Rahul Odedra investigates…
According to unpublished figures put together by the FSA, businesses with more than 50 advisers are struggling, while the vast majority of firms with fewer practitioners are enjoying healthy profits. According to the data – collected from firms’ RMAR records and based on firms’ 2009 calendar year returns – the smaller your practice, the less likely it is to record a loss. Just 8% of the 1,423 sole trader businesses lost money during the period, and 10% of firms with between five and ten advisers (see table below). The figures contradict the perceived wisdom that the next step for a...
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