What are the high-level, long-term goals for your business? Whether it’s an annual revenue target, a number of new client accounts, or a roadmap towards an acquisition, every accounting firm owner has their own picture in their mind of what success looks like.
For returns down the road, the building blocks of growth have to start today. What are the next steps you can take to propel your firm along in an upward trajectory?
Here are 10 essential rules of scaling towards sustainable growth for every accounting firm owner:
Also known as the Pareto Principle, the 80/20 rule is a business observation that 80% of outcomes result from 20% of inputs. Business owners should identify the key 20% of work they or their team does that has the biggest impact on the final output. Those activities should be the priority.
What does this mean for owners of accounting firms? While it’s not a mathematical law, it’s a thought exercise designed to get you thinking about what really matters in terms of value creation in your business.
Put it into practice: take inventory of all final results you deliver for your clients. Can you track those deliverables back to the time you and your team spend on your day-to-day activities?
By trimming unnecessary steps in processes, or reducing time spent on tasks that don’t directly drive towards client outcomes, you can enhance efficiency across your team.
If you bill your clients hourly, you’ll forever have a cap on the money you can make, because time is a finite resource.
An early step towards scaling and increasing profit margins is exploring how to productize your current accounting services into packages, or recurring subscriptions your clients can purchase.
Put it into practice: What’s a common service that most (if not all) of your clients currently receive from you and your team? Could you standardize the rate and delivery model across your client base?
Automation is a major factor in a company’s ability to scale. You and your team’s time should be devoted to tasks only a human with a high level of expertise can do. Everything else has the potential to be automated.
Almost 70% of workers say automation could reduce time spent on repetitive work, and the top three groups of tasks they’d recommend automating are:
- Data collection
Put it into practice: Track the time you spend on every single task. What tasks are done repeatedly? For example, perhaps you manually send invoices every single month. Or maybe there’s a set of checklists you follow when you onboard a new client.
Hear from accounting firm owner Brady Meaux on how he automated client onboarding at his company, Meaux and Co:
Lots of business owners start the hiring process with a job title in mind for their first team member.
But you’re going to go further, faster, if first, you take time to assess your own strengths and weaknesses. The best leaders are honest with where their shortcomings are, and build a team to augment their weak points.
Put it into practice: Separate the role from the title, and make a complete list of the skills you need on your team to deliver for your clients. Craft a strategic job description that takes this into account.
It might be counterintuitive to think about niching down as you’re trying to grow, but expanding your total addressable market won’t automatically translate to more clients.
Instead, think about how to specialize within a market you already have a presence in. For example, tailoring your services specifically to startups or small business owners, or putting a focus on forensic accounting could help you become known in the field.
Put it into practice: Research the accounting practice market in your area, or within the demographic you’re marketing to, and identify how you can differentiate from competitors and stand out to a specific sub-group as the accounting firm for them.
Think about your target customer. What are they trying to accomplish? What other vendors and services do they need, besides a bookkeeping firm or CPA firm, to get where they need to be?
Those are the companies you can partner with to provide a holistic solution for potential clients. If you target small business owners, maybe they need a website before they’re going to make new sales and collect revenue. Partner with a web developer or marketing agency and once that new business needs an accountant, they can direct them your way.
Put it into practice: It’s likely you already have many potential partners in your network. Take stock of your contacts on sites like LinkedIn or Facebook, and consider what a mutually beneficial relationship could look like.
You can also watch this interview with Brian Baum, President of the Pittsburgh Exit Planning Chapter. He gives great advice on how to make partnerships a key growth lever in your business:
Your current happy customers are your best source of new business. Use referrals as one of your main channels to acquire new prospects, and you may find all the growth you need.
When clients are happy, they’re not just willing to refer you - they’re excited to do so. So managing client relationships as the most important piece of your business is critical to long-term success.
But incentivizing clients with a referral program will be the ultimate way to ensure a steady flow of incoming new leads. For example, you could offer satisfied clients a $100 gift card or even a free month of services for every referral that becomes a client. If your offer is strong enough to make an impact on their bottom line, they’ll actively pay attention to their contact list, on the lookout for people who could be a good fit for you.
Put it into practice: It starts with simply having a conversation with a trusted happy client. Tell them about your idea for a referral program, and get their input on what type of incentive is notable to them. Trialing a referral program with a few initial clients is a good way to ensure you have a mutually beneficial structure before you scale it to your whole client body.
Vague advice doesn’t help anyone. So you can engage in content marketing, search engine optimization (SEO), webinars, and social media marketing, but if you don’t have something unique to say, it will sound like noise to new prospects.
Instead, show your expertise by taking a stance and talking about issues and topics like no other accountant in your market. It doesn’t mean you have to invent a new way of marketing - you just need to create actionable, valuable content, and go beyond the obvious facts everyone else is sharing.
One great example of a CPA who is taking his knowledge-sharing to another level is Jason Blumer. He runs his own company, Blumer CPAs, as well as the Thriveal CPA Network, and he’s very active on both his Twitter profile as well as his company accounts. He shares direct, personable videos, and talks about the challenges his audience faces, giving actionable advice to overcome them.
Put it into practice: Whether you write a blog post or start a podcast, make sure you’re clear on your professional point of view on what your accounting practice brings to your clients. Be opinionated on what’s important for businesses to focus on when it comes to their finances.
Delivering client work on time is critical to scaling. Let technology help you do this.
The right workflow software can speed up everything related to growth, and tools like Jetpack Workflow are uniquely positioned to help your accounting practice. With over 50 free accounting templates ready for you to use, you can quickly begin creating a dashboard where you see all work, all in one place, at a glance.
Beyond day-to-day task flow, you can also leverage the capacity planning capability in Jetpack Workflow to gauge when you’re ready to take on new clients, and when you need to hire or automate to free up bandwidth.
Put it into practice: Find the right accounting practice management software that’s intuitive, user-friendly, and you’ll see an instant lift in overall productivity. On average, Jetpack Workflow users save about 10 hours per week. That’s time you can use to focus on growth.
Once the foundation is laid for your core products and services, and you know your ideal customer profile, it’s time to think about two things: new offers, and new regions.
Put it into practice: If you’re focused on providing one specific service to clients, such as monthly bookkeeping, think about what other products or services you could add on to provide more value, and thereby charge more money.
Use the newfound focus on remote work to grow into new regional markets. It’s now normal to get on a video call with professionals all over the country or the world to support your business, and depending on your license and where you’d like to focus, you could tap into a much larger regional market to power your growth.
A growth mindset is step one, but step two? You need a roadmap.
Download the free book, “Double Your Accounting Firm,” and start building your accounting business plan.