Business Growth

Top Six Obstacles Keeping You From Growing Your Accounting Firm

There are various reasons why accountants struggle to grow their business, differing in complexity and attainability. However, there are some common obstacles that accountants face. In this article, we will delve into the six most common obstacles accountants face when trying to grow their accounting firm.

“You will either step forward into growth or you will step back into safety.”

Abraham Maslow – Psychologist

Challenge #1

Acquiring New Clients

In comparison to other professions, accountants have a low client churn, and often this low churn rate results in another obstacle, having too many clients. Regardless of whether you have a low churn rate, or have enough clients, new client acquisition should still be an ongoing consideration for you.

Growing your firm is about more than reaching capacity, you want to attract the best clients into your business. Those that are the most profitable; Those that you enjoy working with. Having a client acquisition strategy that focuses on bringing in the types of clients that you actually want to work with is an important step toward your businesses success.

Solution

How To Acquire New Clients

The first step in acquiring new clients is to identify who your ideal client is. This involves looking at your current clients and determining what you do and don’t like about working with them. Who are they, what do they do, where do they live? Who would you want to work with and who would you not want to work with? To find out more about identifying your ideal clients, read our article, ‘Creating Your Ideal Client’.

Build Awareness With Social Media

A great way to get in front of new prospects and starting the process of moving that prospect into your business is through social media. It is a cost-effective way you can increase awareness and engagement with your firm. With a powerful social media strategy, you can target your audience and be represented on the platform they are engaged with. Social media isn’t about selling, it is about forming relationships and gaining insight into how you can serve your clients better. This is not to say that advertising on social media is ineffective or misguided. In fact the opposite is true. However, advertising using this method is less about your business and more about adding value.

Implement a referral program

Most accountants we have worked with are familiar with this concept. Referrals are a great way to bring in new clients, often for minimal acquisition cost. If you do not currently have a formal referral program in place, it may be a good time to get the ball rolling. This is a matter of moving beyond the ‘would you recommend us?’ and into the ‘Do you know anyone who would benefit from the service we just provided to you?’

Provide Exceptional Client Services

This one is a bit of a no-brainer. Of course you want to provide good client service, however there is a difference between providing good client service and going above and beyond. For example, rather than asking a client if they would like a glass of water, you could grab a bottle of water and two glasses, one with ice and one without. No one does this, but if you do this, your clients will love you for it.

Be Found In Google

When a prospect is looking for a new accounting firm, the first place they go is, you guessed it, Google. One of the best strategies that you can implement for your business is getting your firm to the first listing in your city. To see where you currently show up, open up a private session in your browser, go to Google and type in ‘accounting firms [your-city]’. Are you first? Second? How about third? The first three listings get 65% of all clicks in any given Google search. This means, if you aren’t in the first three, you have a 35% chance of a prospect visiting your website. This statistic is reduced to 1.5% if you aren’t on the first page. It is crucial that you show up in Google, if you aren’t, you are losing business.

“Any sufficiently advanced technology is equivalent to magic.”

Arthur C. Clarke – Author

Challenge #2

Adapting To Changes In Technology & Automation

The accounting industry is being transformed with the introduction of Xero and other cloud based accounting software. With the move toward the cloud, a lot of the complex tasks and process have been simplified, benefiting your clients and making your day much more structured. While advances in technology have vastly improved the day-to-day processes of your firm, it has led to a lot of repetition. Thus, bringing the right technology and automation into your business can make vast improvements in you and your teams productivity. It can be overwhelming, considering the number of options available to you.

Solution

Choosing The Right Tech For Your Business

Growth isn’t just about acquiring new clients, it’s about scalability, efficiency and productivity. One way to improve your productivity is through the use of software tailored to the accounting industry. While Microsoft is an obvious choice due to spreadsheets and outlook being so widely used in the industry, over the last few years, better, more specialised options have been created. By using a software suite that is designed for accountants, you can rest assured that the apps are tailored toward your firm. The apps are designed around improving productivity, not in general, but specifically for accountants. When deciding to introduce new technology into your practice, it is easy to get caught up in traditional thinking. Keeping with what currently works may seem like a good strategy, but the objective here is to grow your firm, not to maintain it.

Actions You Can Take To Improve Productivity

Moving away from a software that you are familiar with may seem daunting, but if you plan to grow your firm, it is something you need to consider. This doesn’t mean that a move to a different app is necessary, it is just something you should be open to. Asking yourself the right questions can help when considering the software you currently use and software you may be interested in using in the future. Some of these questions could be:

Why do we need the software?
Is x software currently serving our needs and solving the problem it is designed to solve?
What is x software currently providing me and my staff in terms of productivity and ease of use?
Does x software provide me with everything my team and I need to get the work done as efficiently as possible?
Is there a better solutions out there?
What would be the one thing that x software doesn’t do, that would prompt me to move to y software?
What is the risk of moving from x software to y software?

“Growth is never by mere chance; it is the result of forces working together.”

– James Cash Penney – JCPenney

Challenge #3

Firm Scalability

It is easy to set a goal of being the largest firm in your city or region, or to be the go to expert for a specialised service. However, once you start growing and expanding, fulfilment becomes an issue. You need to start thinking about whether you can handle taking on new clients, whether your team is ready for that kind of challenge, or if you need to hire new staff to help with fulfilment. Ensuring your firm is able to handle growth depends upon how scalable your business model is.

Solution

Scaling Vs Training The Competition

In the accounting industry, more than any other industry, accountants tend to stay with an accounting firm for a number of years, develop a good sized client base and then start their own practice. This happens time and time again and it is one of the reasons why handling growth has been identified as the seventh most common challenge accountants face when trying to grow their business. In order to meet the expectations of your new clients and handle the expansion of your firm, you will need to hire new staff. Preventing these new staff will depend upon the rapport you create with your clients and how well they are served by your firm, not just by a single employee.

Actions You Can Take Toward Scalability

Let’s be honest, growing a firm beyond a few staff and an annual turnover of $500k is about more than revenue. It’s about creating something that has a lasting impact, providing you with the opportunity to do more than you can currently. Unfortunately most practice owners don’t take this next step, which holds them back from exponential growth. The action that you need to take in order to handle growth and diminish the impact of staff turnover/competitor building, is to take you out of the equation. Moving from working in the business to working on the business is one of, if not the best step you can take toward business growth and scalability. This provides you with the time required to develop your business, gives you an eagle eye view of the processes and systems your firm has and gives you an opportunity to really connect with your clients by adding value in other ways.

“To keep a customer demands as much skill as to win one”

– Anonymous

Challenge #4

Onboarding New Clients

Onboarding new clients sets the tone for the relationship going forward. A negative experience can reduce your ability to offer them other services, ask for referrals, and in some cases keep them as clients. Onboarding can take anywhere from days to weeks, however, the optimal timeframe would be a few days without overwhelming them. This can be achieved through the use of good processes.

Solution

Create and Automate Processes

The subject of automation has led to two prevailing views; Those that love it and those that hate it. This dichotomy is the result of two factors that on the surface appear different, but are similar in nature. Those that hate automation often do so because they fear they will be replaced by it. Those that love it see the benefits of increase productivity that automation brings. How you view the subject of automation will determine whether or not you are willing to automate some or most of your processes. However, automation does not replace the human element, it simply assists the person to do a better job.

Further the relationship

How far along in your business relationship you are with your client will be dependent on how you acquired them in the first place. If they were referred to you, they may trust you, but only so far as their trust in your friend or colleague goes. If you have already started building a relationship with them through social media, then onboarding can be a great time to continue to strengthen this relationship. Business is about relationships and the foundation of any relationship is trust. Trust is built in the onboarding process.

Responsibilities and Commitments

Onboarding a new client is a good time to go over what you are committed to providing them with and what their responsibilities are so you can fulfil your commitments efficiently. It is important to go over what services you will be providing them with, including any limitations to these services as some of the communication may have been lost in the sales process. While discussing the limits to your service to them, it may be a good opportunity to offer to remove these limitations with an addition or premium service. Choose your timing wisely however, you don’t want to overwhelm the new client with information. Further, you don’t want the new client to think that they will be pitched and pressured with each interaction.

“Strive not to be a success, but rather to be of value”

– Albert Einstein

Challenge #5

Pricing

There is a great story about the difference between billing per hour vs billing based on value. It goes like this:

“A graphic designer is at dinner with a prospect discussing their idea for a new logo. After the prospect finishes their brief, the designer grabs a napkin and draws a logo that fits the prospects requirements perfectly. ‘That’s amazing!’ states the prospect. ‘How much will that be?’ the prospect asks. The graphic designer responds, ‘$10,000’. The prospect looks at the designer bluntly and asks, ‘But it took you a couple of minutes to draw it on a napkin, just now. How can you charge me $10,000 for something that took so little time?’ The designer responds, ‘You’re right, it took me 2 minutes to draw a picture on a napkin, but it took me 35 years of experience to draw you a logo.'”

The moral of the story is, as time goes by you are going to become more efficient at delivering great results. Should you earn less because you were able to deliver results quickly and well? The challenge here is, how do you persuade your clients to agree to it.

Solution

Effective Communication

Most objections to price have nothing to do with the price at all. You see, sales is about providing a solution to a problem and the value of that solution depends on the perceived impact it has on the person. For example, the value of a sandwich is very different for an accountant going to lunch with a prospect than it is to a man that is starving. The accountant would likely put the value of the sandwich between $5 and $20, while the starving man would give anything to have the sandwich. The key here is to listen to what the prospect/client tells you and make an assessment based on the problem you are solving.

“A CFO asks a CEO, ‘What if we invest in our employees and they leave?”. The CEO responds, ‘What happens if we don’t and they stay?'”

– Old Business Joke

Challenge #6

Staff

By far the greatest challenge accountants face when trying to grow their firm is finding and retaining good staff. Having staff that lack enthusiasm or are complacent is a real barrier to your success as a business owner. Growth is dependent on your staff fulfilling client needs in terms of superior customer service, and the ability to produce great results for those clients. What’s worse is, when you do find the right person for the job, it can be difficult to keep them. Too much enthusiasm that isn’t utilised and they may be keen to start their own practice. Too much skill that isn’t acknowledged and they might head to a bigger firm with bigger challenges. So how do you get the cream instead of the crud?

Recruiting Winners

Poor technical skill is not a primary factor in poor staff performance. A staff member can be great with numbers, but hold a negative attitude. An employee’s attitude can produce a shift in culture from achievement to negativity like a plague. Unlike skill, you have no control over the employee’s attitude, it is something only they can control. Thus, when you are looking to fill a position within your company, base your decision on the candidates personality traits, what inspires them, and their overall attitude toward life and work. Examine the traits in your top performing staff and try to identify what makes them perform well. Create a checklist if it helps so you can query the new candidate to help determine whether that lack of enthusiasm is simply ‘interview jitters’ or an underlying issue.

Solution

Build A Culture

There is a great divide between great staff and mediocre staff. Mediocre staff are the check in, check out type that work 9 – 5 for a paycheck. They don’t care about you or your firm, so long as they get paid, they’re happy. There are a number of different reasons for this, however, listing their motivations won’t help solve the issue. Great staff on the other hand are ambitious, they want to challenge themselves to achieve greater heights. You can temper that ambition and provide them with the challenges they need, driving your firm to success. Or you can disregard their ambition, or worse, try to diminish it in an attempt to keep them grounded in your firm. This is one of the worst things you can do for your business.

As leaders, it is our responsibility to help our staff learn, grow, and achieve their hopes and dreams. Employee development should be encouraged, not diminished. As the quote above suggests, there is risk in developing your staff and helping them achieve their goals, but there is a greater risk in the opposite. While these great employees will leave you for a firm with better opportunities and better culture, you’ll once again be stuck with those under developed employees that may have been great at one point, but you squashed their dreams and now they are simply process workers.

By building a culture of support, continual learning and development, as well as a spirit of inclusion. That is, including the team in what you aspire to achieve, you will begin to push against the challenge of retaining great staff. If they choose to leave, so be it, they’ll tell their new colleagues what a great place your firm is to work at, driving new staff to your firm. Further, you won’t be losing the only good staff member you have, you will have a team of great staff members. 

Learn About Millennials

You’ve heard the complaints, heck, you may have even been part of the complaining. “Millenials are lazy. Millenials are addicted to social media. Millenials don’t have a good work ethic.” The fact is, all of this is just talk. Yes, there are some Millenials that are lazy, but there are lazy people in all of the generational groups. Further, they do have a good work ethic, it is just different to the work ethic of the past. Where a good work ethic used to mean, going to work, rain hail or shine and just getting the job done, Millenials want more than that. They want to feel like they are achieving something from the work. Rather than listening to the gossip, or viewing just the negative traits, examine their positive traits as well. Take the time to get to know them, build a culture that includes them, and you may find that they are some of your best employees.

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