Make the time to grow your accounting practice
Every accounting firm needs to set aside some time each week to work on expanding its customer base. Increasing the size of your customer base is one of the most crucial steps you can take to build a long-term, sustainable business that will be able to thrive in spite of the challenges it faces along the way. The following are five suggestions for busy accountants who are interested in expanding their practice.
1. Invest in long-term marketing
Investing in marketing does not constitute a single-time expense. You need to continue to focus on and spend on marketing initiatives that have a long-term perspective if you want to maintain a steady flow of new customers through your doors. The first thing you need to do is establish a comprehensive marketing plan. This plan should describe your marketing objectives and the methods you intend to employ to attain them.
Since it is likely that your website will play a leading role in the digital age, you should make sure that a search engine optimisation (SEO) plan is incorporated into this. When prospective clients of your accounting firm look for accounting services online, it will help ensure that your website has a good ranking.
2. Create a business referral network
Creating a partnership with a local company that offers a product or service that is complementary to your own can provide you with access to a large number of new customers at a relatively modest cost.
Create a professional referral network by getting in touch with other local firms that provide professional services, such as attorneys, financial advisors, and suppliers of information technology. But before you do that, make sure you do your research; if you recommend poor-quality service providers to your customers, their faith in you could suffer as a result.
3. Build your profile
You are surely familiar with the concept of a “thought leader.” These are individuals who have developed a significant personal presence within their sector through the use of blogging, appearances in the media, and public speaking engagements.
To get started, you should make a fantastic LinkedIn profile, go to networking events, share your expertise in a series of blog pieces, and send out media releases that market you as an expert who is available for interviews.
4. Upsell your existing clients
Increasing the size of your client base is only one aspect of growing your practice. It’s possible that you’re already benefiting from a mountain of untapped revenue potential that might propel the expansion of your company.
Conduct an analysis of your current customer base to look for chances to upsell additional services. For instance, a client who initially came to you as a humble startup may now have evolved into a profitable small business and may want extra accounting services. If this is the case, you should consider expanding the scope of your services to meet their needs.
5. Optimise your work processes
If you want to continue providing excellent service to your customers despite the influx of new customers, you might need to raise your capacity. Instead of immediately recruiting new workers, it is recommended that you evaluate your existing work procedures and locate any bottlenecks in the workflow that may be limiting production.
Best-practice accounting software, such as QuickBooks Online, can be helpful for automating repetitive chores. This will allow you to grow your client base without sacrificing your profit margin on needless new recruits, which will help you extend your client base.
The accounting practice action plan
Accounting firms that are effective and driven make their clients their first concern. These companies are modifying their business structures and procedures, making investments in new technology, and training and educating their employees in order to facilitate proactive and forward-looking partnerships with their clients.
The companies that are outperforming their rivals also have a presence in specialised market segments. They have a crystal clear understanding of their target market as well as who fits within and who does not fit within their service model.
It is possible that it is time to reevaluate your business plan in order to make the most of the chances presented by the rapidly developing accounting sector in Australia and the shifting requirements of your clientele.
1. Who are your ideal clients?
What is it that motivates them? What makes them so aggravated? What exactly are they trying to find? Is this something that your company can provide?
Take into consideration the market positioning of your company’s brand. What makes your product or service unique in comparison to those of your competitors?
What sets you apart from other service providers and makes it likely that your ideal customer will choose you?
You should be able to express this in what’s called an elevator statement, which is a single sentence that you can use to represent your company to someone in the amount of time it takes for them to ride an elevator. This statement can serve as the prism through which you evaluate all of your future company choices.
You should think about the values you desire to portray to your customers as part of your positioning, and you should make sure that your personnel is aware of these values and demonstrates them while interacting with customers.
2. What are your long and short-term strategic objectives?
Which of the following should be considered a strategic goal for the next one, three, or five years?
Should we expect to see any changes in your goals?
It is not always necessary for strategic objectives to be financially focused; nonetheless, they should always be quantified so that progress can be measured against them as time goes on.
Think about including goals about the pleasure of customers and the retention of employees, as well as goals regarding the amount of money and profit the company hopes to earn in a given time period.
3. Separate strategies
Which of these several tactics do you think will be most helpful in achieving these goals?
To ensure that there is as little room for misunderstanding as possible on the objectives of each division of the company (such as marketing or human resources, for instance), it is recommended that you give serious consideration to the creation of strategic road maps.
This will not only assist you in actively engaging each team but also in effectively communicating your approach throughout the entire organisation.
To put your strategies into action, what kinds of resources do you require?
Take into account the following:
- Services offered – Are the customers coming to you asking for additional perks that you do not now provide? In what ways may you increase the scope of your services to meet their needs better and so secure a larger portion of their spending money? Is it possible for you to build a referral arrangement with other firms that have a client base or values that are comparable to your own? Is it possible for you to purchase a business that aligns with your long-term strategic goals?
- Staffing – In order for you to successfully implement your new plan, which skills do the members of your staff need? Who are the kinds of people who might have these skills, and how can you bring them onto your team if the people who are already working for you don’t have them? Do you have the ability to teach your employees new skills and get them licenced, or do you need to bring in an expert? When it comes to the retention of personnel, successful firms frequently consider new programmes or policies that can be implemented in order to recruit and maintain the finest quality employees.
- Technology – Which technological solutions are required to fulfil the requirements of your ideal customer? Should you think about the cloud and the potential benefits it could bring to your existing infrastructure, and should you consider using it? Or, is it possible that a technical solution could assist you in accomplishing other goals, such as being more responsive and proactive in the servicing of your client base through regular communications? Think about how you may make use of technology to make the processes of measurement and reporting more streamlined and to provide a more real-time perspective of the opportunities and challenges facing your business.
- Brand profile and marketing – Think about how you present your brand and who your ideal customer is. Where can you find your ideal customer and how can you approach them? How should you communicate with them, and how frequently should you do so, according to their preferences? Think about committing to a regular routine that will help you organise your customer communications and the information that you provide to them. Also, think of ways to increase your visibility in the market and how you can leverage your current customer base to bring in additional business. This is typically accomplished through the use of effective platforms, such as events; therefore, consider the events that you might organise and how they would be appropriate for your base.
- Measurement and review – Make sure that all of your activities have defined quantifiable key performance indicators (KPIs) at the beginning, and check in periodically to see how you’re tracking against them. This will allow you to understand the impact of the adjustments you’ve made. It is important for the appropriate employees to check this reporting on a frequent basis and look for chances to improve.
How to Expand Your Accounting Practice by Modifying Your Attitude
There are three categories of accountants, and even though their work environments are vastly distinct from one another, they all have one thing in common:
- The accountant who has recently launched their own company.
- The accountant runs a business, but he’s had a hard time expanding it.
- The accountant who has risen through the ranks of their company but has reached the top.
Three accountants are working in very different locales but trying to solve the same issue: how to expand the accounting firm.
No of where you are in the life cycle of your organisation, the question of how to develop your accounting firm is always relevant. The mindset of those accountants who are having difficulty moving their firms to the next level is the one thing that we’ve observed prevalent among them.
With the Proper Accounting Mindset, Expand your Accounting Practise
It is common for experienced firm owners as well as rookie accountants to be unaware of how significantly their perspective effects the process of expanding their accounting practise. It’s not just about racking up more potential customers. Obtaining a greater number of leads is, without a doubt, a component of the method that must be followed in order to expand your accounting firm; nonetheless, this is not the primary motivator.
You’re probably familiar with the proverb that advises people not to “put the cart before the horse.” In this scenario, the cart represents the leads. In order to successfully close new customers each month, you need to maintain a particular number of leads. Simple mathematics shows that X leads will result in Y customers.
Your mentality is the one who drives this sales machine, also known as the horse. Changing your perspective can have a more significant, overarching effect, which can resonate beyond merely getting more leads, which is one of the goals of growing your business. There is a method for gathering leads, but in addition to that, a shift in mentality is required in order to establish an accounting practice.
Changing Accountant Mindset to Expand Accounting Practice
There are three primary ways in which you can shift your mentality to maximise the success of your accounting firm.
#1 Being Imaginative as an Accountant
Boost the goals you have set. When it comes to the statistics, many accountants have a “realistic” outlook; nevertheless, the challenge is that the seemingly impossible can frequently become achievable with a simple shift in perspective. Take, for instance, the well-known tale of the four-minute mile as an illustration. People had the misconception that breaking the four-minute mark was unachievable for many years. It was the highest point that the human body could reach. Then, Roger Bannister died it. Since then, a large number of other people have also done it, and it’s become nearly standard among the leading male runners.
To illustrate my point, let’s say that your accounting firm is bringing in $300,000 each year. If that’s the case, earning seven figures could sound absurd. But is it really so insane? It has been accomplished by others, and you are a skilled accountant as well. Therefore, the first thing you should do is simply broaden the scope of your goals. How large do you envision your accounting practice becoming in the future? Think big!
#2 Launch New Sales for Your Accounting Firm Each Month
This is something that frequently occurs with accountants who pursue clients who pay them on a recurring monthly basis and whose mentality is geared towards “settling.”
By this, we mean that when you undertake monthly recurring accounting, your perspective will automatically change because of the nature of the work. You’re working your way up to a monthly income of $15,000 or $50,000, depending on what it is that you want to do, and while you’re working your way up to all those numbers, here’s what occurs…
Month One: Acquire three clients at the $2,500 rate each, for a total of $7,500.
Month Two: Acquire seven additional clients at $2,500 each, for a total of $17,500
(If you include the customers from the previous month, you now have 10 for a total of $25,000.)
Month Three: Add four more clients at $2,500 each for a total of $10,000 extra in revenue.
You don’t know what hit you, but when month four begins, you find yourself suddenly banking on $35,000 as your starting point. It’s possible that when accountants deal with regular monthly transactions, they become complacent and start counting on the recurrent. And very soon, they will be unable to sign on any new monthly customers.
If expanding your accounting firm is one of your primary objectives, you should implement a method in which your monthly sales start at zero at the beginning of each month. It’s not that you shouldn’t have customers that pay you on a recurrent basis every month; rather, when you’re tallying up your sales, you should only count the new customers you bring in. It is not necessary to include your recurring sales in the calculation.
This gets you thinking about trying to obtain new clients rather than focusing just on serving the clients you already have. According to this arrangement, you may have monthly recurring revenue of $150,000 in July, but on August 1st, your sales would reset to zero, and you would need to try to outperform the sales from the previous month without taking into account the recurring revenue.
Every month represents a significant challenge to overcome.
When the calendar flips over to the next month, your $80,000 month will reset to zero. Do you think you’ll be able to pull it off again? You have the mindset to struggle every month to keep your firm at its current size because to the prior services you have provided. If you want to build your business with clients who pay you on a recurrent monthly basis, you need to keep your focus on bringing in new business rather than counting on the money that comes in each month.
#3 Discover New Self-Belief as an Accountant
Daydreaming is a waste of time, even if you have lofty goals and begin each month with a clean slate; if you lack the self-assurance to turn your plans into reality, the exercise is pointless. Knowledge and experience are the building blocks of confidence. When you have a comprehensive understanding of a topic, you can confidently speak to its merits. In a similar vein, when you do something repeatedly, you build up your confidence in your ability to do it.
Because of this, it is essential to combine your “big idea” and “beginning new every month” with confidence in yourself to ensure that you are selling the appropriate services at the appropriate pricing to the appropriate customers.
This indicates that you are aware of the specific services that provide the greatest return on investment for your accounting firm’s time and effort; how to expand an accounting practice by selling your accounting services at a highly profitable price that still provides your clients with incredible value; and where to find potential clients who are a good fit for your service.
Do you have extreme confidence in…
What kinds of accounting services do you have available? Do you question whether completing a number of 1040s is the most effective approach to go forwards and get things done? Do you feel comfortable selling tax plans and CFO services and expanding up your operations?
At what rates are you offering your services? Do you consider the idea of filing a personal return for $1,000 to be excessive or do you consider it to be normal? What about a return on investment of $2,000 for the business? You will not be able to set appropriate prices for your products or services if you are unsure of the value of your company.
Who will make up your roster of customers? If the prospect of taking on additional customers gives you the creeps, it could be that you’re not working with the correct kind of customers! Finding one’s ideal clientele is necessary for the expansion of an accounting practice. Are you familiar with their identities?
In a nutshell, the mindset to grow your accounting practice begins with thinking bigger, beginning your monthly sales from scratch each month so you will push harder, and gaining the confidence you need by knowing what to offer, how to price it, and to whom to sell it. Thinking bigger, starting your monthly sales from scratch each month, and pushing harder are all necessary steps. It to! When all of these elements are brought together, expansion for the accounting firm should not be far behind!
Top tips for selling an accounting practice
It is necessary to take into account a number of important factors not only to increase the likelihood of a successful sale but also to facilitate an easy transition for the new owner.
Time of year
One could be tempted to believe that the tax season is the ideal time to sell an accounting practice; this is a reasonable assumption to make. When selling an accounting practice, the ideal time to do so is when cash flow is positive, as the practice will experience both busy and sluggish periods.
However, there is not a single model of accountancy practice that is suitable for all businesses. The busiest practice throughout the tax season will be one that places a strong emphasis on compliance. A practice that caters largely to seasonal clients may see its busiest times of the year at certain points throughout the year.
When you want to sell your accounting practice, it will be easier to find the proper buyer if you do so when your revenue and cash flow are strong.
Size of the accountancy practice
It’s a common fallacy to believe that a sale will be easier to reach if the practice is on the smaller side. The fact of the matter is that there are customers for each and every kind of operation; what’s needed is a varied marketing strategy.
The annual fees that an average accounting firm brings in might range anywhere from $200,000 to $1 million. A practice that is worth $300,000 is in higher demand than, for example, a practice that is worth $800,000.
However, there are also lots of bidders in the $800,000 to $3 million price range interested in purchasing the more well-known companies. The difference lies in the manner in which it is marketed. Businesses in the lower category will attract possible buyers by advertising, however businesses with an asking price between $800,000 and $3 million are typically sold by knowing who is seeking and approaching the potential buyers directly.
In general, first-time buyers in the range of $300,000 to $400,000 are drawn to the offerings of the smaller firms. They are generating a sufficient amount of revenue to warrant the hiring of workers and the expansion of the company. The companies that fall inside the upper range are frequently acquired by existing practices that already have funds available to them and have completed the task in the past, so they do not perceive any risk in doing so.
Keeping a comprehensive database of your clients is an important step in selling your accounting practice. It is more cost effective to maintain the happiness of an existing client than it is to acquire a new one. However, there is always the concern that customers would stop doing business with the company if they find out that it is up for sale.
Don’t lose your cool! There is a way to handle this problem, and the key is to continue operating as normal during the process.
When it comes time to sell, it is essential that the current owner be willing to continue on for another six to twelve months. Even if it’s just on a casual basis for a few hours a week, it will assist make the sale and the transition simple and seamless if you do it.
Dealing with the sale and the transition in stages is the optimal strategy. This affords the existing owner the opportunity to familiarise customers with the new proprietor and ease them into the concept of transition over a period of time.
This is not as difficult as you may imagine because the current owner is typically selling so that they can retire. They would be more than willing to ease out gradually if given the opportunity.
Technology and data
Another common misunderstanding is that in order to sell your accounting firm, you need to have all of the most recent technological equipment installed. This is not a deal-killing issue. Paperless operations are more likely to be implemented by more recent businesses, but there are still plenty of accountancy offices that have been in business for many years that rely on more conventional methods of data storage.
Every company has its own system, and in general, buyers anticipate having to integrate their own systems with those of the business they are purchasing.
When it comes to selling, fees can be a problem. On the other hand, it is not insurmountable. If a company hasn’t raised its prices in many years, people may view them as being unreasonably low now because of this.
The buyer will almost probably have an interest in raising the prices charged by the company, but they must be aware that this cannot be accomplished overnight. Because it will take some time to successfully implement a new pricing structure, the primary focus should be on managing the expectations of the purchasers and making the change in stages.
It is crucial to plan ahead when you are putting your accounting practice up for sale on the market. It is only reasonable for prospective purchasers to investigate the company’s history in terms of its financial success. It is essential, however, to emphasise the prosperous times that lie ahead for it financially.
You might have recently acquired new customers, implemented innovative technological solutions, or increased your workforce. Anything that has even a remote possibility of increasing your revenue in the months and years ahead should be brought to your attention.
Mitigating the risk
When it comes to the process of selling an accounting practice, there is no obstacle that cannot be overcome. It is vital to detach from the feeling and keep in mind that nearly everything is up for negotiation. You can almost always find a solution to lessen the risk.
Everything depends on how you organise the business transaction. Take for instance the possibility that just one customer contributes 25 per cent of your total revenue. It is understandable that a potential purchaser might be concerned about the consequences of losing even a single customer.
The issue can be circumvented by requesting that the current owner continue working there on a part-time basis for a period of time between three and six months, or until you are certain that the customer is okay with the transition. Another option is for the buyer to join the company initially as a partner, which will help the company transition more smoothly into the sale.
Is there a member of your company who would be interested in taking over the practice? Although at first blush, this may appear to be a tempting proposition, it is critical to examine the idea in light of all of its positive and negative aspects.
Again, it’s necessary to detach ourselves from our feelings and think about this situation strictly from a business perspective. Does the potential buyer possess the financial resources necessary to acquire the company at the asking price? Are they equipped with the necessary business acumen, expertise, and leadership qualities to run their own company? Have you set aside some time to instruct them?
There are instances when it is in the best interest of your company to market itself and sell to a customer with whom you have no prior connection.
Preparing for sale
When marketing any kind of business, preparation is the most important factor. The more thoroughly you prepare, the more successfully you will do the task. Start planning the sale six to twelve months in advance so that you have enough time to analyse the success of your practice and make any modifications or upgrades that are necessary to make it more appealing to a buyer.
Your client base and your ability to keep them are two of the most important things to think about, along with your price structure, personnel and employment contracts, and any leases or licences you may have. Think about the aspects that set your firm apart from others that offer accounting services. Imagine that you are a possible customer who is interested in purchasing the solution, and think about the features of the process that would appeal to you.
The expansion of your company
In order to assist you in effectively navigating through the sale process, it is necessary for you to involve both your financial adviser and your solicitor at an early stage. It is also essential to think about the process via which you will sell your company. Keep in mind that a business broker who specialises in accounting practises may already have interested purchasers waiting for the practise that they are selling.