Top 10 Secrets to Grow your CPA Firm Profits
By Working Smarter Not Harder = More Free Time and Money
To-Do What’s Most Important to You!
- Leverage- you cannot do everything! Delegate, delegate, then delegate some more. Push all work down to the lowest level of competence. Owners, managers and supervisors doing bookkeeping, tax return data organizing, data input and other mundane compliance or administrative jobs are missing the opportunity to help their clients with value-added work which will command higher billing rates. They are also not marketing their firm and acquiring new business.
- Use KPI’s daily to ensure that your firm is running at top efficiencies. Every staff member should be monitored to ensure that they are performing at top efficiency and are not missing the opportunity to be chargeable by sloppy timekeeping or forgetfulness. Time should be charged during the day as the work is performed. Time is lost when someone has to remember it at the end of the day or the next day. A half an hour missed each day equals 2.5 hours per week or 125 hours per year. At an average billing rate of $100 per hour that amounts to $12,500 per staff member in lost revenue per year!
- Performance goals for all staff, management and owners which cannot be manipulated using the three-legged stool approach. If you give someone a goal that only has to do with chargeable hours, guess what? You will see chargeable hours increase to meet that goal. But what good would that be if write-downs during billings increase and teamwork or other important administration and marketing efforts decrease or overtime increases?
- Use the Pareto Principle, it will really work for your firm. The Pareto Principle, also known as the 80/20 rule, where 80% of your revenue comes from 20% of your clients. Likewise, 80% of your client-relation problems come from the clients that create 20% of your revenues. Problems like billing write-downs, collection problems, complaints, poor respect for you and your staff, etc., etc. Don’t be afraid to fire these clients and see number 6 below.
- Define your ideal client. Look at the 20% of your clients that are producing 80% of your revenues and define what makes them ideal clients for your firm. Then search for new clients that match that criteria. These are your “A” clients. The ones that value you, your work and will view you as their trusted advisor to the point that they will not make a decision without passing it by you for your advice or opinion.
- Develop and grow one or two niches. It is easier to be an expert in one or two industries than it is to try to be an expert in all industries. Again, look at the 20% of your clients that are producing 80% of your revenues and identify one or two industries that stand out. These are the industries that you want to develop or would have an interest in developing razor-sharp focus expertise in. Then study that industry, subscribe to publications, take CPE, learn everything you possibly can to help advise your clients. Develop industry-specific KPIs, forms, templates, etc. It is much easier and more effective than trying to do these for many or all industries.
- Define your unique selling proposition. Generate unlimited leads for your practice by developing a unique selling proposition that separates you from all of your competition. If you look at your present website and advertising as well as your competition, I am willing to bet that they all look the same. Potential clients will come to the conclusion: so what? All the ads will say who you are, where you are located, all the services that you offer, that you’ve been in business for umpteen years, and that you deliver quality, timely professional services. SO WHAT! That’s what they expect from a professional. How can they possibly pick the right one for their needs if they all look alike?
- Develop value-added services and expertise. All accounting firms offer compliance services. But guess what? Clients don’t like to comply and they hate paying for it! Therefore, they do not value compliance services and see it as a cost rather than an investment. They will always be very price conscience and may shop for a lower price. Value-added services such as business advisory and coaching can dramatically increase the profitability of a business and its cash flow. The client will see a direct correlation between these results and the money they are paying for your services. When you can show your client that you have a solution that they can’t find to a problem they can’t solve, that is true value-added! The amount you charge is no longer a cost, it is an investment that they see an immediate return on.
- Bundle Services. Unfortunately, we still have to do the compliance services, so why not offer value-added services and bundle them with compliance services? Then charge an annual fix fee for the bundled services. One of the deepest fear that accounting clients have is how much is this going to cost me? When they get the answer that it depends on how long it takes us and what staff member works on it and their billing rates vary from $60 to $250 per hour, the client is totally in the dark and anxious. If they were offered a fixed fee, then both parties have a complete understanding of the deal. Just imagine if you went into a sandwich shop and the price of the sandwich had the same variables, how would you feel about ordering one and paying for it?
- Get a coach to help you manage and grow your accounting firm. This may seem self-serving, but I live in Lake Placid, NY, the site of two Olympic Winter Games and the 1980 Miracle on Ice; the greatest sporting event of the 20th Century according to Sports Illustrated. I see athletes with their coaches training here for the Olympics all the time. Imagine them or the 1980 US Hockey team pursuing their goals alone without a coach. Pretty foolish wouldn’t you say? Then why would you try to grow your most valuable asset, your accounting firm, without a coach
We have all been there, saying, “I know what I have to do, and I can do it myself.” Sure you can, it isn’t rocket science.
You just need to do it. But when? You have been meaning to do it for years now and every year-end you see missed opportunities and less than stellar results, don’t you? Another year that you were too busy working in your business and had no time to work on your business. Why, because you did not have a coach to hold you accountable and to get the important things done to increase those profits. Someone independent that can see what minor adjustments need to be made to make huge improvements in the bottom line. Remember the famous saying “doing the same thing over and over again and expecting a different result is the definition of insanity!” If not now, then when? Give me a call at 518-524-6915 or go to www.CPABusinessCoach.com and let’s see how we can improve your bottom line and find ways for you to work smarter, not harder, to give you more personal free time and money to do what matters the most to you! See me as an immediate return on your investment!
Leave a Reply