Growing a CPA firm isn’t easy. There are many dynamics that must align to get a team rowing in the right direction. With a distinct gap between growth rates of the best-performing firms and the rest of the pack its no surprise that high-growth accounting firms have a “secret sauce.” In this blog post, we’ve identified 7 reasons why low-growth CPA firms struggle a bit more than their high-growth counterparts.
By far, the #1 factor influencing stagnation in accounting firms is complacency. The truth is, many CPA firms just get comfortable. This lack of momentum is often a result of the firm’s compensation agreements. Essentially, Partners do what they’re paid to do but lack consequences for poor follow-through. High-growth firms fight complacency with proper management and align compensation plans to encourage behavior for firm growth.
Wrong, Low or No Expectations
Many firms talk about their desire to grow, yet most won’t set expectations for their Partner staff. High-growth firms set clear expectations for how partners, and potential partners, should contribute to growth. Firms allocate billable time for Partners to invest in professional growth development and then they track and measure the results. Firms also build an internal culture around growth and instill these ideals early to develop their staff’s marketing and business development capabilities.
Not Doing the Right Things
Sometimes we see firms spending too much of their time in the wrong areas, wasting precious dollars on sponsorships that don’t have strategic value or taking part in activities that aren’t generating results. Typically, these firms either aren’t measuring outcomes or they don’t know how to evaluate what is or isn’t working. High-growth firms measure the right things and employ people, whether inside or outside the organization, that can help them assess how they are doing.
Lack of Commitment
Low-growth firms tend to be more talk than action; they make excuses or play the blame game and when promises aren’t kept, there are little to no consequences for it. Firms that express a desire to grow but won’t commit to the steps necessary for momentum won’t see results. Period. High-growth firms make sure they can follow-through on their commitments and treat their growth plan as a critical component of the organization.
Lack of Direction
Many low-growth firms don’t know where they want to grow, who they want to serve or even what makes the firm unique. This lack of identity often results in taking on clients that the firm shouldn’t be serving and generating lower level work. High-growth firms have a clear vision for their growth. They know who they want to be serving and how to qualify them. They spend more time on higher level work and gradually shed their D clients.
Lack of Execution
Many firms know what they should be doing and may even have a plan, but if they fail to execute on those activities their efforts are wasted. If there is one thing we have learned in marketing, it’s that nothing will get accomplished unless you execute. Tactical problems and client work will always get in the way. High-growth firms push past these obstacles and make executing on growth a priority.
Lack of Investment
While there is no magic number for investing in growth, you can’t make a dollar without spending a dollar. Some firms are so focused on increasing profit by cutting expenses that they never give themselves a chance to invest. High-growth firms actually spend less on marketing than their low-growth counterparts. Instead, they focus their investment on the things that have a true strategic purpose; in other words, they aren’t afraid to say No to partners, employees or marketing if there isn’t a good case.
If your firm is struggling with growth or is unsure about how to kick start growth, contact us today. We’ll help you assess and identify your specific roadblocks and develop a plan to help you navigate them so that you can get your firm moving faster and in the right direction.