I’ve spotted a trend…
Something that’s fairly widespread across established practices…
Over their first 10, 20, 30 years they grow up to a point and then they stop.
They hit this invisible glass ceiling.
And for the next few years they neither grow, or decline, but instead stay in some kind of limbo where despite all their hard work throughout the year churning out work, they don’t move.
And this can be incredibly frustrating and demotivating as a practice owner. Fighting hard all year round with nothing to show for it at the end.
Now the reason for this glass ceiling comes down to the model the practice is built on.
If you truly want to smash through it, and double or even triple the size of your practice then your model and thinking 100% has to change. I go into more detail on that and how you can change your model in this article here.
But what generally happens at this point is practice owners will say:
“If only I had more clients coming in my practice would start growing…”
They think that the silver-bullet they’re looking for in order to kickstart growth in their practice is ‘more clients’.
And whilst this may hold some truth, there are much easier (and often more rewarding) ways to get some quick revenue wins.
Jay Abraham, business and marketing strategist, famously said there are 3 ways to grow any business:
- Increase the number of clients
- Increase the avg £ value per job/project
- Increase the avg number of jobs/projects per client
Put simply, that breaks down to:
Marketing i.e. winning more clients is only one-third of this 3-cylinder ‘growth engine’. And more often that not, it’s the hardest for practice owners to see any results from…
Now, this is not to say don’t focus on marketing…
Marketing is absolutely a fundamental part of any successful accountancy practice, and one that requires time, consistency and a team of people (i.e. not you) to make it work.
But often there are quick wins that can be had when focusing on pricing and sales.
Let’s run through some hypothetical numbers…
Disclaimer – You are accountants. Your job, primarily, is to interpret numbers. The following numbers are purely hypothetical (although entirely possible) for the sake of explaining the point…
So, you start in year 1 with a total revenue of £300k.
In year 2, you decide to pursue the ‘more clients’ approach and after months of hard work setting up your marketing team and warming up prospects you end up with a net total of 30 new clients. Your revenue increases by £36K.
In year 3, you decide to focus on your pricing. With the use of a modern fixed pricing strategy leveraging software, you manage to increase your avg £ value of projects/jobs to £1700. Your revenue increases by a nice £140K
In year 4, you decide to focus on sales. By training your team to cross-sell additional services to your clients throughout the year, your avg number of projects/jobs per client increases to 1.5. Your revenue increases by an incredible £238K.
And finally, in year 5, you decide to fire your growth engine on all 3 cylinders, focusing on a combination of marketing, pricing and sales. Your revenue increases by another £366K.
What you can notice from the above is that combining focus on marketing, pricing and sales at the same time is clearly the best strategy for growing your revenue.
So, what can you do to your pricing and sales for some quick revenue wins to kickstart growth?
- Increase your prices. Most practices don’t and won’t. This will be more successful when you follow the other steps below.
- Implement a fixed pricing system for the majority of your services, and a value pricing system for some of the higher value ones.
- Implement quoting/proposal software e.g. GoProposal or Practice Ignition (most of my clients who’ve done this have seen some pretty nice fee increases…)
- Train your team on how to use the above software so that more people can sell
- Ensure additional work orders/proposal adjustments are carried out so that work doesn’t get done for free and is instead billed for.
- Educate your clients and team about all of the additional services that you offer, and train your team to be able to offer these when they feel a client needs them
The above list isn’t exhaustive but will give you something to start with.
How many cylinders (marketing, pricing, sales) is your practice currently running on?
Get some quick wins and you can kickstart your practice growth today.
But remember, if you truly want to smash through your glass ceiling and grow your practice, then your model absolutely has to change.