Growing Smart

Growing Smart
Avoiding the One Mistake Firms Make Exploring Growth Strategies

By Paul Dunn and Shannon Vincent

Accounting-firm growth is a quarry every firm pursues. Sadly, the hunt often ends with limited results. This is because of a simple problem: firms are looking in the wrong places to grow.

Many firms around the world make the same mistake—amazing for its obviousness—about growth strategies.

One question always uncovers the mistake. When asked what percentage of their current client base is taking advantage of all of the services that a firm offers, managing partners worldwide tell ReNew Group that it is very rarely more than 10 percent.

It is amazing how many firms look outside their client base for growth. And we suspect we now know the reason.
But before we get to that, it’s worth observing that when a firm looks to its current client base for growth, it receives multiple dividends in greater profits, reduced marketing costs and key learning, such as identifying core competencies and niche opportunities.

Looking Outside for Growth

Why is it that firms spend thousands of dollars on a firm brochure, yet don’t invest an hour with an existing client to find out how many more services the firm can provide to that client?

The reason could be that firms feel that they’re doing a good job with their clients and it’s better to leave them alone. So the reason is actually fear. The result is that clients are left with unmet needs and issues—issues that the firm could solve if only they asked.

Firms fear that if they actually did ask, they’d somehow be swamped with work. (That’s not the case, by the way. When firms do ask and uncover a list of needs, clients are happy to schedule that work to be completed within six to 12 months on average).

It’s odd that firms engage in the less productive, less effective exercise of going outside their client base to pursue a strategy that will generate less work for more effort.

This could all be turned around simply by finding out what your existing clients’ needs are. There are five questions guaranteed to generate more work from existing business clients. Ask clients how they rate the quality of the management information they receive from their systems; how happy they are with the return on investment of their business; how sure they are that their business tax strategy is aligned with their goals; how disciplined they are at preparing a cash flow forecast that is reliable and regularly reviewed; and how well documented their accounting systems are.

Asking these questions is part of what being a trusted advisor and having a growing practice is all about.

Paul Dunn and Shannon Vincent, of ReNew Group, will host a June 16 event for the New York State Society of CPAs called “Ignite Your Firm: How to Take Your Clients, Profits, and Practice to the Next Level.”

For more information and to register go to www.nysscpa.org and click on the “Events Calendar” link at the very bottom of the page. This link will enable you to navigate to the desired event.