Let me count the ways! More than just survive, it's time for the small CPA firm to prosper! First, let's take a brief look at the times.
Our nation faces overwhelming, ever increasing debt, unbridled spending, skyrocketing unemployment and increasing taxes. Many business experts and economists, even the Chairman of the Federal Reserve System, have said a long-term plan must be implemented now! A key to the long-term success of small CPA firms also lies in planning, and we too must do it now!
In my opinion (recognizing that free advice is sometimes worth what you pay for it!), the worst of our economic downturn is yet to come! Fear will hit the markets, the indexes will plummet and the economy will nose-dive. So, how can the small CPA firm prepare? Here are some things to think about.
Evaluate the potential of our clients. Someone once said that 20% of what we do accomplishes 80% of our objectives. On the flip side, 80% or what we do contributes to only 20% of our objectives. Unfortunately this is true for many small CPA firms. Our worst clients take most of our time! It's hard to do, but it's time to decide which clients to serve. Some clients are actually going to prosper during the rough economic times ahead. Some are going to drain us as they head down the drain; we need to let these clients go!
Remember the old cliche', "when the going get tough, the tough get going?" When adversity threatens, what can we expect from our clients? A president of a growing business said to me recently, "I will not quit!" This proactive leader has positioned himself in the center of a self-developed marketing network, is producing quality products that are priced far less that his competition and has kept his overhead very low. When the worst of the economic downturn occurs, his market and his profits will grow! This man has planned and developed his business to accommodate economic change. If necessary, he is willing to change again with the times. He has great potential for success and would be on the top of my list for "preferred" clients!
Plan the nature of our services. Are we positioned in the service areas that have high potential during troubled economic times? I met a sole practitioner in a large city recently that made decisions to focus her practice in increasing areas of need in her marketplace. She provides mostly tax and accounting services, along with audit schedules preparation for larger CPA firms. She performs no attest services and has positioned herself to satisfy the growing need for non-attest services. Even in tough times she will have an abundance of work!
I'm not suggesting that every small firm give up audits and reviews, to the contrary. Audit and reviews are also becoming a niche in the small firm marketplace as prospective clients look for fee structures that are less than those charged by larger firms. Some small firms are positioning themselves to meet an increasing demand for cost-efficient attest services during troubled economic times. Is your firm positioned?
Invest in the future of our firms. Here are a few suggestions that may help take the bumps out of the road ahead:
- Train, train, train. Plan for staff training that builds resources from the ground up. For all functional areas of practice, all personnel should have a solid foundation. For example, I'm currently presenting a basic staff training series on www.cpelink.com that focuses on "how to audit." Participants at these webcasts include practitioners with experience ranging from entry level to many years. These participants realize that to provide audit services effectively and efficiently, we must understand the basics. Whether it's CPE or on-the-job training, a CPA firm's investment today produces success tomorrow!
- Revisit firm policies. With a focus on efficiency for all functional practice areas, we must war against tradition. If we have to change our traditional approaches to getting work done, even if we have to invest in new technology to create efficiencies, the time is now! Thinking outside the box will increase our success in the future. For audit and review services, this thinking should drill down to the practice aids we may have relied on for years. Small firms are beginning to create proprietary audit documentation that meets the needs of their clients and are "canning" their voluminous "canned" purchased practice aids. By creating proprietary practice aids based on both current quality control and auditing standards, these firms are prepared to win even the peer review battle!
Post a comment and let our readers know how you are preparing for success in these times. Visit our website at www.cpafirmsupport.com to contact me or to register for our free email newsletter.
Larry Perry, CPA