Practice barrier #8: ensuring your accounting firm can handle growth
For an accounting practice to grow, the client base must also grow. But the expansion of work that this results in can create headaches for those that aren’t prepared. How well equipped is your firm to handle increasing numbers of clients and work?
You can overcome all other barriers standing in your accounting firm’s way, but if you can’t reproduce what makes your firm great as you take on more clients and staff, you will only be able to grow so far.
It is vital that your practice is able to grow smartly—in a way that will minimize the risk of problems arising. You must have the necessary strategies and processes in place that will allow for organic growth.
How does it impact you?
Perhaps ironically, the hundreds of accounting firms from around the world that we surveyed identified the ability to handle growth effectively as the seventh most common practice barrier. Countless accountants spoke of difficulties ensuring the traits that made them successful in the first place, didn’t break as soon as their client base began to expand.
Accounting is a high-touch industry and clients demand a certain level of personal service. With only so many hours in the day, taking on an additional client meeting may mean that another client will be left neglected. Even the time taken for one extra phone call needs to be taken from somewhere (or someone) else.
Every accounting practice that is serious about growth must have an ability to scale.
What can you do about it?
Manage capacity like airliners
Few businesses are required to handle more customers than airliners. Think about how they handle their capacity. Customers are sorted into classes— economy, premium economy, business or first class—and a small number of seats are often left vacant for any last-minute emergencies (to which a frequent flyer will always be given priority over a casual customer). You can handle your firm’s capacity in a similar way.
Your best clients can be classed as “A” clients. These are your first-class frequent flyers who you should go out of your way to please—whatever they require, you are there to provide for them. Even if they phone you at the last minute, you alway ensure that you have the necessary space to take them on board.
This thinking can be replicated all the way down to your “D” clients. These are the clients you are happy to have—they might be your most common client type—but they’re also the ones you’d bump down if you run out of space. They’re not the ones that keep you in the air.
Deal with the bad clients
If you are managing your client capacity effectively, it inevitably means that you will need to rid your firm of the odd client. It’s crucial you don’t shy away from this. Like airline customers—your clients aren’t all created equal. Some can even harm your practice, through hurting revenue or decreasing staff morale.
Hopefully, you have an idea of who your ideal clients are and have focused your firm on providing the best services for them. You should then spend some time considering what to do with your current clients who might be less than ideal.
When handled correctly, moving a client on can be a smooth process for yourself and your client. If you’re struggling, you can explore our how to transition bad clients.
Structure your practice like a business
When looking at how to best manage growth, it pays to look beyond businesses the same size and in the same industry as your own. Few businesses are set up to scale as effectively as the big corporates—think about how they are structured. Roles are broken down so that everyone knows their primary role—particularly for those responsible for essential tasks aside from servicing clients. Consider doing the same for your firm.
Break down your staff into business functions and roles such as sales, marketing, and onboarding. Or go one step further and appoint a CEO, CFO, Sales Managers and Account Managers. This doesn’t mean that the existing client servicing responsibilities of staff need to be neglected, but it will allow them to have greater focus and clarity of their duties away from clients—particularly as you grow.
Many firms struggle to handle their growth because they haven’t invested in the business resources like other businesses might. This can be fixed by giving your staff the time and responsibility to focus on these essential functions.
If you are struggling to grow your firm, we challenge you to implement at least one of these ideas. If you do, we’d love to hear the progress and result. You can also reach out so one of our advisors can help you out.
Also, if your firm has implemented any other strategies to manage your growth, we’d love to hear from you.