Accounting firm growth 101: Strategies to expand your business
Here are 5 strategies you can use to help grow your accounting firm.
Blink and you’ll miss it.
A shiny new automation tool, a cutting-edge advancement in AI, a standard practice suddenly outdated.
In today’s economy, industry advancements move at a lightning pace. Clients and stakeholders are demanding tangible results, a clear demonstration of ROI, and growth-focused financial partners.
Which means for accountants, the stakes have never been higher.
To grow and succeed in this environment, it's essential for accounting firms to develop a growth plan that addresses incoming accounting technology trends, and industry and business.
Short-term wins may deliver quick returns and a much-needed boost, but long-term plays are the foundation upon which lasting success is built.
To grow sustainably, you need them both.
It’s important to note that one person’s growth is not the next person’s. Growing your accounting firm isn’t necessarily about increasing the number of staff. It might mean an increase in clients overall, more revenue, more profit. It might mean all of the above or none of the above to you.
Understanding what growth means to you is a crucial first step in growing your firm.
Here are five accounting firm growth strategies that can help generate new revenue.
5 strategies to grow your accounting firm
Provide more value to retain existing clients
Expand your services
Consider mergers and acquisitions
Make strategic partnerships
Invest in marketing
1. Provide more value to retain existing clients
According to Forbes, an increase in client retention by 5% can lead to a company’s profits growing by 25% to around 95% over a period of time.
Moral of the story: your existing clients are among your most valuable growth assets.
Whether they’ve been a clients for 10 days or 10 years, it’s important that you advocate for every client and provide them with a continual stream of value.
There are many ways you can do this throughout your clients’ financial journeys:
Truly understand their needs. Schedule regular meetings, surveys, or feedback sessions to gather insights into their unique financial goals and pain points.
Tailor your services. Accounting never has and never will be a one-size-fits-all operation. Use your understanding of your clients’ needs to customize your services.
Offer exceptional customer service. A satisfied client is 83% more likely to refer your services to others and stick around for the long haul. Enough said.
Communicate proactively. Overcommunication shows your commitment to your clients’ success, reduces anxiety, and keeps you top-of-mind when they need accounting services.
Share educational resources. Educate your clients on what matters to them via webinars, workshops, articles, and curated newsletters. This will help them with decision-making, plus keep you positioned as their trusted advisor.
2. Expand your services to find new clients
One of the more powerful ways you can grow your firm is by building out your accounting advisory services.
Today, forward-thinking accounting firms are offering additional services like:
Cloud accounting and technology integrations
Cybersecurity and data protection
Data analytics and business intelligence
Virtual advising services
Blockchain and cryptocurrency consulting
Financial wellness and employee benefits
Healthcare consulting
According to NAB Professional Services, one in five small-to-medium enterprises would like advice on financial services and growth opportunities on top of the services they already receive.
When it comes to trusted accounting professionals taking on that role and expanding into the advisory space, Ian Vacin, Co-founder of Karbon, puts it this way:
“You [the accountant] know the books better than anyone, you understand the business, and clients just can’t get that from another advisor… you have all the right tools, all the right information [to advise] and, ultimately, your clients will get a better service.”
3. Mergers and acquisitions (M&A)
One surefire way to grow is to literally get bigger.
Mergers and acquisitions for your accounting firm open up the door to a larger client base, more employees, and heightened resources to reach your goals.
It’s important to note that according to the 2022 Karbon Practice Excellence Report, when firms tip over into the medium-sized category (51+ employees), they actually become less agile and implementing change becomes more difficult.
This may be the reason why only 22% of new businesses launched in the past 10 years have successfully scaled their operations.
Accounting firms become less proficient in Practice Excellence when they reach 51+ employees
So, before embarking on any M&A activity, it's essential to develop a clear strategic growth plan that aligns with your firm's value proposition.
Identify the specific goals you aim to achieve through M&A—whether it's entering new markets, expanding service offerings, or gaining access to a larger client base.
Safeguard your firm through the challenges of M&A growth by:
Making sure the systems, tools and apps you have in place are designed to grow with you
Ensuring everything you do is built for scale, both client-facing and non-client-facing
4. Make strategic partnerships
As solopreneurs and small-firm owners grow their businesses, they often need to bring on additional leadership.
Jason Blumer, CEO of Blumer & Associates, attributes much of his firm’s success to his decision to partner with his COO, Julia Schipp.
“You can only get so far fully by yourself,” says Jason.
Strategic accounting partnerships enable firms to diversify their service portfolio, access specialized expertise, expand geographically, and enhance their competitive edge. This includes anything from joint ownership and mergers down to technology and affiliate partnerships.
Here are a few things to keep in mind as you assess whether or not an organization would make a good partner:
Market relevance. Does this partner’s market or industry align with your target client base?
Cultural fit. What’s the cultural compatibility between your firm and the potential partner? Do they have a shared ethos, values, and work ethic?
Reputation and trustworthiness. What is the potential partner’s reputation like? Would their track record positively reflect your firm?
Client overlap. Is there any overlap in your respective client bases? While some overlap can be advantageous for cross-selling, an entirely identical client base might not provide the desired market expansion.
Finally, don’t forget to develop a clear exit strategy if the partnership doesn't work out as planned. Before committing to any partnership, assess all of the risks and address issues related to intellectual property, client transitions, and financial arrangements.
5. Invest in marketing
You can’t grow your accounting firm without an effective marketing strategy that consistently generates leads, creates new opportunities, and presents additional revenue streams.
And that doesn’t mean just talking the talk—accounting firms need to intentionally and purposefully invest in their marketing function. In fact, one study found that high-growth firms have over double the marketing staff and resources than low-growth firms.
What does this look like in practice?
Here are a few marketing strategies to get your growth goals off the ground:
Start a blog. Content marketing strategies like blogging help you nurture your prospects, talk directly to your target market’s needs, and establish yourself as an expert in your niche. If you need more convincing, firms that blog are 13x more likely to increase ROI.
Optimize for SEO. 91% of high-growth firms include SEO in their marketing budget. It’s one important lever of a successful long-term digital marketing strategy. It includes keyword research, optimizing your website's technical performance, creating valuable content around relevant keywords, leveraging local SEO, and building high-quality backlinks.
Invest in paid advertising. Use pay-per-click (PPC) advertising on platforms like Google Ads and target specific keywords and demographics. It’s one of the best ways to extend your reach.
Send direct mail. Don’t believe what you hear—snail mail isn’t dead. If you take the time to carefully segment your mailing list, sending a business card, brochure, special offer, or even a personalized letter can go a long way in building stronger relationships that digital channels can’t replicate.
Start posting on social media. Use platforms like LinkedIn, not to advertise your services, but to share valuable information related to your target market’s challenges.
Lean into podcasting. Starting your own podcast can be a great way to reach potential clients. It might even end up becoming another revenue stream for you. But, managing a podcast requires significant effort. An alternative approach would be to appear as a guest on established podcasts. You’ll expand your reach across new audiences, and you never know, it might help form some market research.
Create a referral program. 91% of customers say they’d give referrals, but only 11% of salespeople ask for referrals. Some referrals will happen organically, but with a dedicated effort, they can become a major source of quality accounting leads.
Once you start investing in marketing, it’s important that you have a way to manage your incoming leads. This Lead Management template will help you maximize conversations and turn leads into happy clients.
The Lead Management template from the Karbon Template Library
👉 Download the Lead Management template
The right time to plan your accounting firm’s growth
The accounting industry is in a state of constant evolution, shaped by technological advancements, changing regulations, and evolving client expectations.
And the firms that are committed to growth are responding with action. They’re providing their clients with value, forming strategic partnerships, and investing in marketing. This is how they’re staying ahead.
But how do you know when the time is right? What are the signs and signals that your accounting firm is ready to make the leap?
Demand is increasing. A growing number of clients seeking your services is a strong sign that your firm is ready to expand.
There is a capacity for expansion. You’ll have the resources and infrastructure to accommodate a larger client base and invest in new growth areas.
You have a strategic vision. You can’t know where you’re going without a roadmap. A well-defined growth strategy and a clear vision for the future are essential.
You’ve analyzed your market. You should have a clear picture of activities in the market and a vision for how your larger accounting firm will fill the gaps.
Your clients love you. Positive client feedback and a high Net Promoter Score (NPS) can signal that your clients are ready for an expanded relationship.
Another helpful tool for assessing your firm's readiness is Karbon's Practice Excellence Assessment.
This assessment can help you gauge your firm's strengths, weaknesses, and readiness for growth. You’ll also receive a tailored list of recommended resources to help you grow in the areas that you need to reach unprecedented growth.
Learn more about Practice Excellence.
How practice management software boosts accounting firm growth
It’s important to note that you can only go as far as your accounting software and tech stack will carry you.
Practice management software can play a pivotal role in boosting the growth of your tax, accounting, CPA, or bookkeeping firm by streamlining operations, consolidating communication, enhancing client relationships, and providing you with data you can trust to help you assess growth risks and goals.
Take Gauvreau for example, an accounting firm that leveraged its tech stack to complete a successful merger with Envolta.
To navigate a complex process like a merger, they used Karbon to form a complete client picture within collaborative timelines, and smoothly integrate their sizable client databases.
“With Karbon everything is there. We can see history from long before the merge for either side, ensuring we can answer questions as a complete group with the complete picture,” says Victoria Peters, CFO at Gauvreau.
The same sentiment is echoed in other firms who prioritized their accounting tech stack to reach their growth goals:
Two Roads grew by 60% in 12 months with streamlined client onboarding and features like saved work dashboard filters.
BNA grew its revenue by over 13% per year with a collaborative client task hub and organized document management.
Full Stop won a B-Corp award by giving back to their community with a tool that allowed them to act as more than an accounting firm.
You can, too.
Karbon can support your firm’s growth with features and functionality like:
Automated workflows. Streamline your financial processes end-to-end with workflows that automate real-time client data collection and file storage, templatize processes, and organize your work, tasks, and email into one united action plan.
Karbon AI. With generative artificial intelligence built directly into the context of your firm, you can summarize emails and notes, adjust your tone to improve your outgoing email, and compose email drafts from workflow tasks.
Project management. Every project you complete brings you one step closer to achieving your growth goals. With Karbon, you can track job progression, identify bottlenecks, and have complete transparency into what and when.
Business analytics. Within the context of your entire workflow, Karbon automatically builds reports that give you easy-to-read insights into exactly how your firm is performing.
Billing and payments. Using Billing & Payments in Karbon consolidates your systems, provides automation at every step, and takes hours off your billing process.
The path to actualizing your growth potential begins today
As purse strings tighten and client expectations heighten, it's time to challenge what you thought was possible and explore new avenues and strategies for sustained growth, especially for those firms that have hit a ceiling within their niche or current firm size.
By embracing innovation, adaptability, and new technology, accounting firms can rise above these challenges and create a path to long-term success.
And it all starts with bringing your team, clients, systems, and data together in one place with a better practice management solution.
Book a demo with Karbon to see how you can start actualizing your path to growth or get started with a free trial.