Have you ever wondered why certain accounting firms grow exponentially and have higher profitability than others? What is the secret behind it that the rest of the firms don’t know?
There are over 46,000 public accounting firms in the United States. The total revenue of the accounting sector was 127.8 billion U.S. dollars in 2020, 133.4 billion U.S. dollars in 2021, and is expected to reach around 142 billion U.S. dollars in 2022.
Competition in the accounting industry is also growing along with the increase in revenue. You’ll need to take a lot of action(s) to increase the growth of your firm, and you might be eager to get started right away. But first, you must figure out where you want to go. There are a lot of strategies you may plan to achieve growth like taking on more clients, offering more services, etc. An accounting firm’s strategic plan must include efficiency and a clear endpoint. Your goals will keep you focused, and remind your team about their primary focus and the firm’s long-term target.
Invest More in Marketing:
Fast-growing firms not only invest in accounting professionals, but they also allocate higher budgets for marketing than slow-growing firms. Marketing is about compellingly communicating your firm’s narrative and attracting more clients. There has been a rising association between marketing budget and excellent performance in business in recent years.
Here is the suggested marketing percentage for new and established companies.
You can also decide your monthly marketing budget using the graph below.
Foster Loyalty With Existing Clients:
Making new clients is not the only way to generate new revenue. In fact, a large amount of business generated by top accounting firms comes directly from existing clients. To take an advantage of this, your firm should prioritize establishing client relationships and promoting loyalty.
You can capitalize on cross-sell and upsell opportunities, professional service firms must develop a deeper and broader relationship with their clients. When they go beyond finance and actually grasp the client’s business, that is when the magic happens.
The 80-20 Rule (Pareto Principle):
The 80/20 rule, often known as the Pareto Principle, is a business observation that 80% of outcomes derive from 20% of inputs. Business owners should identify the crucial 20% of work done by themselves or their teams that has the greatest impact on the final product. These activities should be prioritized.
Salespeople’s performance results across a wide range of organizations have shown success by adopting the 80-20 rule. Furthermore, external consultants that employ Six Sigma and other management methodologies have successfully implemented the 80-20 approach in their practices.
Demonstrate Your Firm’s Ability:
Use every chance to demonstrate your firm’s knowledge and professional acumen, from your firm’s business owners to accounting professionals should deliver a lecture, participate in or regularly arrange a podcast, conduct a webinar, or publish a blog post on LinkedIn. This is how people in the modern economy identify, trust, and eventually hire experts—firms like yours.
You can check out the following graph for Social Media trends and make a strategy related to the platforms accordingly.
Product/ Service Innovation:
Conduct some strategic planning around the current products and services, as well as look for new ways to complement them. This might also include reducing some of the existing services and introducing some more profitable ones, or raising the price of existing products.
Make Your Firm Stand Out:
Many of the high-growth firms’ top priority is to differentiate their firm and make it stand out. With the increasing competition in the accounting industry, this goal is a must-have to generate referrals and attract new clients. A successful firm differentiates itself from the competition by doing something or multiple things differently than the others.
These secrets will help your firm grow exponentially and convert any average or below-average-performing firm into a high-growth firm. As you now know, it is not complicated as it appears. You just need the will to succeed and the proper knowledge to make it happen.
According to a study, high-growth firms achieved a compound annual sales growth rate of 20% or higher for at least three years. This benchmark was met by 29.7% of the firms in their sample. The rest saw average or no growth.
What will be your firm’s growth over the next three years? You might not know the answer, but you know that now your firm will fall in that category whose numbers are getting counted.