How to Overcome the Challenges of Growing a Firmby
Like a lot of business owners, many accountants don't follow a straight path to business ownership, which can lead to challenges, especially when it comes to growing a firm. In this article, top-ranked business coach Loren Fogelman explains some of the most common challenges faced by new firms and discusses some of the strategies to improve growth and avoid burning out.
Did you follow a traditional career path? Or was your course altered along the way? For many accountants, their route to business ownership was not straightforward or intentional. Perhaps you started a side hustle while working for a firm, or your life circumstances changed, requiring more flexibility, and you decided to go for it. According to The Recruit Venture Group, 33 percent of full-time business owners didn’t think they’d be running their own business, while 40 percent of people who own side businesses didn’t expect it to grow into a full-time business.
Overall, success can be messy, especially when your firm grows organically without a plan. As your accounting firm evolves, you encounter challenges that you hadn’t anticipated. If you're an "accidental" business owner, you may have faced some of the common challenges below.
The Top Challenges that Growing Accounting Firms Face
These 10 challenges often impact an accounting firm’s path to success.
Upper-limit Challenge. If you calculate rates according to how much time is required, the only way to earn more is to work more. Earning potential maxes out when time is maxed out.
Burnout. Firm owners often dedicate long hours to work. It’s not uncommon for accounting professionals to tell me they work 60+ hours per week or seven days a week. Accountants without a business plan often find themselves sacrificing personal time for work – even when it’s not tax season.
Lack of Boundaries. Perhaps notifications on your phone are constantly pinging for your attention and weekends and evening hours are no longer sacred time. Maybe you feel a responsibility to quickly respond to work-related messages even after hours. If so, you might need to establish boundaries.
Lack of Priorities. If day-to-day activities fill your calendar, those busy tasks can become an excuse to avoid larger, more tedious projects. As a result, there’s little time available to prioritize working on growing your business.
Employee Mindset. An employee mindset can inhibit your fees and your growth and downplay your expertise. Unless you delegate lower-level tasks, they’ll continue to max out your time. Without a strategic plan, accountants end up self-employed instead of business owners.
Lack of Communication. This causes your accounting firm to run you instead of the other way around. You end up adapting to client requests instead of having clients adapt to your systems and processes.
Generalising. Serving a wide variety of clients each with their own specific requirements and expectations can be challenging. If your website reads like a laundry list of services your firm might be too generalized.
Underpricing. Some accounting firms never raise their rates for fear of clients leaving. It’s common for legacy clients to never receive a rate increase.
Unclear Systems. Perhaps the systems you envisioned remain in your head. As a result, it’s difficult to build your team, delegate routine accounting tasks and ensure continuity.
The Value Equation. Remember that technical skills, like tasks, reports and forms, matter more to you than to your clients. It’s one of the reasons why potential new clients are unable to differentiate your practice from others who offer something similar.
You want to take care of your clients. No client request is too big or too small, so you readily add services as clients request them. But saying yes to everything can stretch resources too thin, causing you to be overworked and leading to burnout. Overall, it’s not sustainable.
A lack of clarity about what you do, who you serve and how your clients’ benefit from your services can take a toll emotionally, physically and financially. Instead of being streamlined and efficient, your business becomes clunky. Remember that you want your practice to run like a sleek, thoroughbred race horse.
If any of these scenarios sound familiar, consider developing a strategic plan. This resource can serve as a guide to keep your business from going astray.
Resolve Your Firm’s Growth Challenges
Even with all these challenges, 90 percent of "accidental" business owners say they are happier than when they worked for someone else. A couple of strategic moves could help to resolve some of your firm’s growth challenges.
Determine your limits. Identify what you do, who you serve and why your service matters to your clients.
Develop a growth strategy. I prefer a strategic plan to goal setting because the plans are more adaptable.
Define your firm’s value. Understanding your value influences who you work with and your fees.
Design processes and workflows. This allows your firm to grow and improves efficiency, and it also educates your client about expectations and how to work with your firm. It’s a lifesaver.
Delegate lower-level tasks. Free yourself from basic, routine tasks. This allows you to focus on high-level work that will help to grow your business.
Where to Start
Start small by identifying one or two changes you want to make over the next 90 days. Then, schedule time to make those changes, even if it’s only one or two hours each week. If you’re not getting results, then adjust your plan or seek out support.
Steady progress over the course of time is more like a marathon than a sprint. Whether big or small, celebrate the milestones and acknowledge your achievements. Then, enjoy a lighter workload without reducing your bank account.