In all areas of business today, complacency is lethal and nowhere is this more evident than in the accounting sector.
Now, more than ever, accountants are looking to take their firm to the next level and claim a space in a rapidly changing market. Here are nine tips to help your firm stay relevant in a non-stop, ever-evolving digital age, and that will hopefully assuage any fears of being left behind:
1. Stop trying to do everything (and none of it well). Tax, audit, bookkeeping, advisory services ... the list of what you could offer to clients goes on and on. The best way to stake a claim in a highly competitive environment? Find a niche and execute with confidence. You don’t have to be everything to everybody, and in the end, it’s probably better if you aren’t.
If you choose to embark into a new line of business, establish team leaders to take ownership. When possible, look internally for someone with an existing reputation and a passion for the service (i.e., cloud, controller, bookkeeping, etc.). By dividing and conquering your offerings, you can empower each team to become the “best of the best” in that specific area. Your team will (hopefully) rise to the challenge, and customers will associate your firm with high quality and expertise.
2. Set reasonable profitability goals for new business lines. Currently, 94 percent of businesses see their CPA firm as strategic advisors, giving firms plenty of opportunities to provide more value and better leverage their relationships. As accounting firms launch new offerings, teams must set profit goals accordingly. Be realistic and know that most new business lines will not be profitable for the first two or three years. While a firm may be accustomed to set utilization and billable rate goals for more mature business lines, new metrics must be created to judge performance of new business lines.
There is a level of investment that is required to start a new line of business, and it will often take a brand-new mindset to invest into a team that’s not initially profitable. Remember to reward the team that is executing well, even if profitability is not at the level of more mature business lines. You’ve had years to allow your audit and tax practices to mature, so be sure to rethink your profitability, goals, and timelines when launching a new offering.