Congratulations! Your accounting firm is growing! You are no longer a small mom-and-pop business with just a handful of accountants doing all the work. So, now what?? This transitional time is critical for firms and their future success. This article will dive into what steps to take and a few to avoid, to grow a firm to the next level while maintaining profitability.
When is it time to change strategies?
Successful accountants take advantage of change. When do firms need to start thinking differently about managing their growth? Unfortunately, there is no magical red line that, once crossed, signals it is time to make some changes. That would make things far too easy! However, some guidelines indicate if the firm is poised to start thinking about a new growth strategy.
10-20 million dollars in annual revenue
10-20 million is a wide range of dollars, and each firm is vastly different, so don’t change everything the minute you hit $10 million in revenue.
Team size is 30-50+
Managing a significant number of people is too much for just one person. The firm needs to keep track of everyone and their quality of performance.
General workplace feeling is off.
Are accountants still enjoying what they are doing? Feelings are hard to assess when they are not tied to metrics, and accountants LOVE their metrics. Here are a few metrics to track the overall feel and stress around the firm. How are turnover levels? Are employees feeling burned out? These can be sure signs of needing to change the processes in the firm so teams can feel balanced.
Profitability is not tracking upward with the growth.
Profitability not tracking with growth is a red flag that alerts an urgent need for a new strategy. Profitability should follow the same trend as growth. When it is not, the firm needs to understand why.
Changing strategies without compromising.
Deciding where to start often brings stress and anxiety. Here are a few places to consider making changes to manage growth without compromising services.
The processes
From first contact through service delivery, what is your accounting process? Is there even a process in place, or is it just getting it done and out the door? An organized workflow is the first critical place to evaluate and adjust when creating a new growth strategy.
Find and eliminate time-consuming and error-prone areas.
Search out the most time-consuming and error-prone areas. Then invest time and effort in adjusting and critiquing any processes. Discover and eliminate pain points to achieve the most significant ROI.
Cut out the busy work.
Streamline mundane tasks using technology, better processes, or using lower-cost employees to complete the tasks. Busy work is time-consuming and expensive, consuming valuable time and resources.
Ask questions and do the research.
Research is vital when creating new processes in the firm. Ask employees about their pain points and if they have any suggestions to resolve them. They may have simple solutions that are easy to implement.
Find the bottlenecks.
Growth has a way of highlighting bottlenecks and bringing them to the forefront. Bottlenecks slow down the process affecting profitability and frustrating clients. They need to be discovered and eliminated.
The people
People are an organization’s most valuable assets. People make a firm successful and facilitate the growth discussed in this article.
Hire key employees.
As a firm grows, more people will need to be hired and join the team. Avoid the mistake of assuming the same employee structure will continue to work. Gone are the days of hiring more accountants to handle the additional workload. To achieve continued growth, a firm needs more than accountants. Hiring the right support staff is critical. A successful firm runs most efficiently when all areas are balanced and operating at a high level. Look to hire managers, operation specialists, and IT staff to support the needs of a growing firm.
Don’t forget the core team.
While more people are necessary for growth strategy, remember those who have stuck with you from the beginning. Take the knowledge and experience they have amassed and use it! That is valuable stuff! Empowering staff to do their jobs more efficiently with a straightforward process will increase profitability and keep growth on track. Managing employees well cannot be overlooked. Remember, work smarter, not harder.
The Money
“Show me the Money!” Spending money is inevitable when implementing a growth strategy. It is critical to spend money in strategic ways.
Invest in the right tools.
Take a proactive approach to invest in resources that will expand the business’s capacity. These kinds of investments can include things like new technology, support staff, equipment, and infrastructure. Ensuring teams have the right resources to complete their work efficiently is vital.
Spend wisely.
Capital investments eat up a LOT of cash. Be sure you are investing each dollar as effectively as possible. Do your research. Money doesn’t grow on trees (haha, our parents were right about that!) so create a strategy for spending.
Final Thoughts
Any growth strategy must begin by understanding the firm’s goals and aligning the appropriate complementary strategy. When one knows the desired destination, the steps to get there become clear. Use the resources available to the firm, search out new ideas, and don’t be afraid to ask for help. Growth requires change, not just any change. Precise, planned, and organized change will make the transition from a small to a more complex firm smoother and more profitable. Reach Reporting assists the growth of firms by reducing redundancy, automating reports, and providing powerful resources that your clients will love.