Gale Crosley, President of Crosley Company, knows how to scale accounting firms. It all starts with systematic, sustainable growth.
Gales had 35 years experience in the industry including work with Arthur Andersen and PWC. Now, as a growth consultant for mid-market accounting firms, she works with firms like yours on a personalized level, using proven steps to make sure this year is better than last year.
In this interview on Growing Your Firm Podcast, David Cristello and Gale Crosley we go over:
+ The difference between short term, tactical growth vs sustainable growth
+ How to niche down and specialize to avoid commoditization and price battles
+ How to bridge the gap between maintaining current services and building out new service offerings and profit centers
+ and much, much more. Click below to listen
Learn more about Gale and Crosley Company at:
Company Website: http://www.crosleycompany.com/
Gale Crosley’s Book “At The Crossroads: The Remarkable CPA Firm that Nearly Crashed, Then Soared”
Gale’s list of articles and interviews: http://www.crosleycompany.com/articles/
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Scaling Accounting Firms Isn’t What It Used To Be:
Gale Crosley, named one of the Top 100 most influential people in accounting, has seen major shifts in the accounting industry since she started 35 years ago.
“It’s a different animal now,” she says. In the past, you could take bankers and brokers to lunch and get a steady stream of referrals. Now, business owners tighten their purse strings when it comes to giving away their books to an accounting firm.
My, how that’s thrown firm owners for a loop. Without warning, it seems, firm owners saw theeir referrals careen off a cliff. What might be the problem?
Gale says accounting firms are only seeing the systems instead of the potential scaling opportunities. Firms only look at the symptoms:
- They try and change their prices
- They focus too much on the competition and what they do
- They wait for referrals to pick up again (when they won’t)
- Younger employees don’t want to cultivate new prospects
Gale recommends not looking at the symptoms of bad business growth. Rather, look at the big picture causes. Look at the market and how complex it is.
What kind of big picture causes?
- Regulation changes
- Sustainability of your current business model (pricing by the hour?…)
- Changes in technology (still doing returns on paper?…)
- Recession / Global economic shifts
Building a Business Model For Growth:
Finding the big pictures causes only takes you so far. The next step is doing something about it. First, you must figure out the actual business model for growth. Your current business model doesn’t work. How you’re getting clients doesn’t work.
- Lead the growth don’t just “do” the growth
- This means staying ahead of changes you see. Technology shifts? Lead the industry…don’t be passive
- Get specialized
- What industries and niches can your team members take over in your area?
- Make sure your growth goes along with your core competencies
- Don’t like doing payroll for clients? Why do you keep adding payroll clients?
Growth is a process. You can’t scale your firm if you don’t understand the roots of growing first.
Scaling accounting firms requires a delicate balance of long-term vs. short-term thinking.
Long-term thinking requires planning for 2-5 years out and what steps to take now to hit those milestones. Short-term thinking obviously deals with the problems on your desk collecting dust at this moment.
Is it possible to balance both ways of thinking?
Hire someone to work on long-term. Hire someone to work on short-term (you probably have all your team working on short-term thinking right now anyway). You can’t grow if you don’t plan your growth, and that’s what a specialized employee will do .
Long-term growth requires serious planning to know what you should be doing. That’s where the grunt work comes in.
How To Know What You Should Be Doing To Grow:
Gale says: If you want to know the “what” and “how” to scale accounting firms…it all comes down to rolling up your sleeves and talking to the market. Now, I know what you’re thinking: You already know what clients want. You know the problems they have.
Actually, you only know a fraction of it.
You can’t effectively grow without seeing the changes in the industry. You see the changes in the industry by knowing what your clients want before the rest of the industry. The way to do that is quite simple. Talk to them.
Interview non-clients, thought leaders, interview current clients. Ask : “What are the issues you, Mr. Industry Leader, see in the accounting industry today? Then, just listen.
You’ll need to do some major, heavy interviewing before you find the similarities and repeats of the problems and changes out there.
DAVID’S TIP: Before I launched Jetpack Workflow, I interviewed accounting firm owners about the problems in the market. It was only then I saw a workflow problem popping up again and again that I knew software help would be a winner. And, it works.
Want to know the super secret to applying this information you receive? See how other industry’s applied it. Don’t try and reinvent the wheel. See how other industries changed the status-quo, what mistakes they made and how they perfected the process.
First Step To Scale Accounting Firms:
Finally, here’s the first step for growth in your firm. I already alluded to it. You need someone to focus on the long-term growth of the firm.
See, typically in an accounting firm, managing partners run the ship in regards to business development. However, they also must juggle the day-to-day operations. Those daily operations normally engulf their long-term strategies thus leaving their firm hobbling from one day to the next.
Hire someone strictly for “hunting the wholly mammoths” as Gale says. To find long-term, large clients to accelerate growth you never thought possible before. This requires investing a little upfront in the right person to see a massive payoff in the end.
We didn’t have much more time to cover growth strategies in this podcast, but if you check out Gale’s blog, you’ll get a deeper analysis into what she’s talking about.
Now, the question remains: How do you plan to see steady, predictable growth this year and the next 2-5 years?