The Roots of Revenue Growth in Today’s Competitive Climate
Marc Rosenberg, CPA / Mar 3, 2020
“As long as the roots are not severed, all is well. And all will be well in the garden.”
That great line is from the 1979 movie Being There, starring Peter Sellers as the simple-minded Chance the gardener, whose unpretentious dialog is misinterpreted by titans of government and industry as being extraordinarily prescient, and indeed, his statement is a perfect analogy to CPA firm marketing and growth.
The “roots” of revenue growth are these:
- Growth is change, and if your firm doesn’t change, it’s easier for other firms to take your clients. Like most organizations, without growth and change, CPA firms become complacent. They stagnate, condemned to a lifetime of mediocrity, and eventually wither away. As with so many business triumphs, growth starts with the right attitude and the willingness to do things that may be outside your comfort zone.
- Understanding clients’ needs and providing great service are prerequisites to growing with them.
- Firms with a marketing strategy that gets executed will outgrow those that shoot from the hip or stand around waiting for good things to happen.
- Don’t be ordinary. Don’t be like every other CPA firm. Fall in love with different.
Practice Development = Marketing + Business Development (sales)
These terms are mercilessly and exasperatingly misused throughout the CPA profession, often interchangeably. Understanding these terms is critical.
- Practice development is the umbrella term for all things that firms do to increase revenue.
- Marketing is all the things firms to do make selling easier. It includes promotion, advertising, market research, branding, creating name awareness, and
- Business development is selling: asking for and getting the order.
To paraphrase Chance the gardener, if we embrace these basic truths about practice development, firm growth will be good, and all will be well at the firm.
Today’s public accountant operates in a highly competitive climate where your best clients are your competitor’s top prospects. To survive the fee pressures applied by low-cost providers and the aggressive marketing of other firms, practices must focus on achieving sustainable, profitable growth.
But old paradigms die hard.
The accounting business is a long-standing profession often characterized as conservative and resistant to change. Many things are still done the same way they have always been done and firms have historically enjoyed a great deal of success adhering to this paradigm. We believe the future of the industry is about changing the paradigm. Firms that choose to stay the same may eventually be left behind.
Here are some long-standing paradigms that no longer apply:
- Technical competence trumps all other skills in order of importance. Business comes in one’s technical expertise in performing work that satisfies.
- Partnerships should operate like a collegial gentlemen’s club. The term “accountability” is a foreign word because partners feel they don’t need to be managed and can be relied upon to manage themselves.
- The nature of CPA firm work doesn’t lend itself to teamwork. Oh, sure, there are some team aspects to operating a CPA firm. But the bulk of the work performed for clients is managed by an individual (almost always a partner) with the work completed by individuals. Serving clients is not a team sport.
- Leadership development consists of giving staff the opportunity to succeed, then waiting for them to prove themselves. You either have it or you don’t, and if you don’t you’re out.
- Partners are all expected to be clones of one another. Every partner needs to bring in business, have technical expertise, train and mentor staff, maintain great relationships with clients, achieve a certain level of billable hours, and so on.
Take a hard look at these outdated paradigms. If your firm hasn’t moved away from them yet, now would be a good time to start.
This post is excerpted from our latest release: CPA Firm Growth: Keys To Practice Development by Marc Rosenberg, Jeffrey S. Pawlow and Charles Hylan.
This book teaches growth-minded firms time-honored practice development tactics that still work while providing bold new ideas: how to spend marketing dollars wisely, how to outgrow the competition and take the firm to the next level.Learn More