The steps you take to starting a practice are fairly straight-forward: You apply for business licenses, find some affordable office space, come up with a snappy name for your practice, and sign your first client. But launching an accounting practice is only half the battle. Next, you work long and hard hours, building your client base bit by bit and then it happens: you hit a brick wall. You can’t add on more clients without adding overhead, and when you add more overhead, it eats into your already thin margins.
This isn’t necessarily a cause for concern. After all, your bills are getting paid and your current clients are happy. But at the end of the day, when you look at your MOM revenue and see a thick, flat line, you just aren’t satisfied. You know in your heart that greatness is within your reach, you just aren’t quite sure how to get there. Well, we’ll tell you all about the three simple ways any practice can grow their business on even the tightest of budgets. Examine Your Current Client Base First, ask yourself three simple questions: Do I know why our clients chose us? Do I know why they stick with us? And, do I know what our clients need going forward? These fundamental questions are too often taken for granted. The first two in particular are often waved away with a curt answer: “Because we’re great at what we do.” While that may be true, competency is not a defensible position. Competency is table stakes. If you want to scale your business, you need to determine what makes your practice different and what you can promise that your competition can’t. Maybe it’s technology. Maybe it’s price. Maybe it’s your bedside manner. Maybe (and hopefully) it’s because of some great, proprietary process you have in place. The point is, it’s almost always not simply because you’re keeping their books balanced and whatever that reason is, that’s a core quality you should focus on in your pitch to new clients. Answering the third question is much more difficult to answer, but also orders of magnitude more important. Having an open and ongoing dialog with your clients is beneficial for many reasons, but the most relevant to this topic is the ability to determine which services you should prioritize adding to your practice’s offering. For example, outsource CFO services are a big trend in today’s marketplace, but if your existing clientele lets you know that ensuring compliance is hot on their minds, you might invest in better auditing capabilities to grow your current client billables before hiring on a financial advisor to try and chase down new leads. These three simple questions will give you a starting point for determining the right way to market your business and finding the new revenue you need to grow. Efficiency is Everything Time is a resource that must be managed well in order to achieve scale, and it’s important that we recognize that. Too much time? You end up with a cadre of accounts who are burning hours on things that don’t bring in money. Too little time? You either have to increase overhead by bringing in additional people or overwork your employees and increase the risk of a mistake being made. Many practices make the mistake of trying to find that balance of resources through new business, when you really a lot of resources can be freed up by implementing new processes. Think about it this way: Say you want to grow your business of a 100 clients by 10%. From a new business perspective that means you need to sign 10 new clients and consider hiring on a new CPA to handle the increased workload. Taking a process oriented approach, you instead look for ways to cut down on the time it takes to deliver services. If you cut the time it takes to service a client from end-to-end by 10%, the extra margin you make on servicing your existing clients is nearly equal to the profit gain you’d make from adding on 10 clients under the old model. But that’s not all. By increasing efficiency in your operations, you’ve also increased your existing workforce’s capacity by 10%. This means you can still go out and add on those 10 new clients, only this time, you won’t need to add to headcount to service them. Finding and implementing more efficient processes is the best way to unlock profit potential. It’s not just a good idea, it’s probably the most critical component to taking your business to the next level. When you work smarter and not harder, you better believe it pays. Leverage New Technology Since the invention of the wheel, added efficiency has been the primary driver of technology adoption. Today is no different. It’s no secret that the accounting industry in the US skews conservative, but being bearish on technology often means money left on the table. There are countless case studies of more technologically advanced firms in the UK and Australia accelerating the growth of their businesses by readily and eagerly embracing new tools. And even in the US, we are seeing pioneering firms outpace more conservative firms thanks in part to their use of new technology designed to make their business hum. The first step to unlocking efficiency is switching away from desktop software and starting to use cloud-based software like QuickBooks Online or Xero. That’s a big first step, and you don’t have to tackle it all at once. In fact, it’s typically recommended that you migrate a small handful of clients to cloud systems at first until you can familiarize yourself with the software and how it works. Once you start working in the cloud, you’ll notice a number of small things that make servicing clients more efficient. Things like automatic bank reconciliation, a single ledger system that keeps the clients and your CPAs on the same page, and powerful web-based reporting that makes generating PowerPoint and Excel reports a thing of the past. The most powerful element of cloud based accounting tools are the API. Without getting overly technical, the API allows other tools to communicate with your accounting software and share data. Tools like Receipt Bank, advanced accounting automation software that helps you streamlines bookkeeping by automatically extracting valuable financial data from client submitted receipts and invoices. Customers who use Receipt Bank save dozens if not hundreds of hours per month on bookkeeping by letting the software do the legwork and having their accountants focus on the client. Read Article: http://www.accountingtoday.com/partner_insights/articles/3-ways-to-scale-your-practice-on-a-shoestring-budget-79413-1.html Comments are closed.
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September 2017
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