5 Tips for Growing Your Accounting Firm

Growing any business can be challenging and growing your accounting firm is no different. It’s reminiscent of the phrase “slowly at first, and then all at once.” It can take months to years to lay the foundations for future business growth. Making the right move early, even if you don’t see results right away, can set you up for success.

This guide outlines the different strategies accounting firms can use to supercharge their growth and provide better service to their customers.

Cross-Selling

The first strategy is cross-selling, or making additional sales to existing customers. Examples of cross-selling could include taking on additional locations or geographies for an existing client, or performing both external audits and tax preparation services for a client. (Please note this second example is jurisdiction specific, as some places prohibit accounting firms from providing both auditing and tax preparation services for clients.)

Cross-selling should be handled carefully, and only offered if your firm is equipped to provide the same great service with its new offerings as it does with its legacy services. This requires doing a lot of background work, potentially including hiring new employees, offering additional training to current employees, and establishing systems to monitor any additional legal or regulatory issues that may arise.  If handled incorrectly, providing new but sub-par services could sour your relationship with existing clients and lead them to seek help elsewhere.

 Move into New Markets

Another popular growth strategy in the professional services sector is to move into a new market. Instead of offering additional services, this involves offering your existing services in a new geographical area or business sector. If you only provide services in one town, you might try opening a satellite office in another town or working with new industries.

This strategy carries risks as well. It may pose additional legal or regulatory hurdles that require additional employee training. The work you’ve put into establishing your firm’s reputation in one market may not immediately carry over to your new market. To break into a new market, you might have to replicate all the work it took to break into your current market, including running ads and attending trade shows, with no guarantee of results. You’ll also want to make sure to avoid any potential conflicts of interest that could arise when offering services in multiple markets.

Provide New Services

This strategy may be linked to the cross-selling strategy, as you can’t cross- or up-sell to existing customers without having additional products to sell them.

Another strategy option is to develop an entirely new service offering. An accounting firm, for example, might decide to offer financial planning or internet security services on top of its traditional tax practice.

This strategy often takes significant investment in the form of time and money, and could divert resources from billable work or other essential activity. It could pose additional legal or regulatory burdens. This strategy could also backfire and dilute your firm’s reputation.  Do you remember those old “one size fits all” socks that fit everyone badly? It’s the same concept. Sometimes, offering everything to everyone means you’re offering everyone the same bad service. Some accounting firms may do well by providing services to many markets, while other firms may falter if they apply this strategy. It’s about finding the strategy that works best for your business.

Mergers & Acquisitions (M&As)

Mergers and acquisitions (M&As) are a time-tested strategy for growth across many different industries. This strategy allows firms to build their client base and expand their expertise in the fastest way possible—by acquiring something that’s already been built. M&As can fill critical gaps in service offerings and produce new revenue streams or efficiencies.

Like all the other growth strategies in this guide, M&As pose some risk. Make sure you properly vet all potential acquisition targets. M&As can pose cultural challenges to your firm, and may result in diluted brands or marketplace confusion.

Organic Growth

Organic growth is usually both the healthiest and the slowest way to grow. It tends to be a more reliable and valuable source of growth than M&As or moving into new markets. Organic growth requires setting yourself up for success, including researching and courting ideal target clients, making connections, and providing high-quality service that produces client referrals and good word-of-mouth marketing for your firm. Ideally, accounting firms can combine their organic growth with marketing campaigns and outreach that highlight your success serving clients and your expertise in different markets.

The Right Foundation for Success

Most of these growth strategies also come with risks, frequently in the realm of additional regulatory and legal requirements. Successful accountants know they need the right tools to help them stay on top of changing regulations and market conditions while providing top-notch services to their clients. Often, the simple accounting software that was great at the beginning can become an obstacle to growth. Solutions like QuickBooks often don’t have the tools you need to monitor changing regulations, or quickly handle processes like manual reconciliations or multi-entity consolidations.

That’s where we come in. At CertiPro, we’re experts in helping companies including accounting firms cut costs and optimize their operations. We know the challenges accounting firms face, and we’re committed to helping our clients grow. Contact us today to learn what modern accounting software solutions like Sage Intacct can do for your business.