I think that there’s a common assumption in business that sounds like this…
“Every business owner wants to grow their business.”
And whilst this may be true for lots, it certainly isn’t true for everyone.
I’ve spoken to many accountancy practice owners over the years and in fact have a number of them as clients, where growth simply isn’t the goal.
They’re happy with the size of their practice. They don’t want it to double in size or deal with multiple offices throughout the UK.
They’re out of the ‘hunting phase’ where they’re always looking for one more client to keep the practice running, and somewhere in the stability phase where they don’t necessarily need streams of new clients coming in all the time.
What they want instead is to maximise their profitability, take home enough money to look after their family and/or invest into things and reduce the amount of time that they spend working in the business.
But why choose not to grow?
Keeping your accountancy practice smaller can have a number of benefits.
Some of these include:
1. Increased profitability
As a smaller business your overheads are likely to be much less. You can then use your additional profits to pay yourself a better wage, or even invest into other businesses or property.
2. Greater flexibility
Smaller businesses have much more flexibility than bigger businesses. It’s much easier to change direction, develop new offerings and change your processes etc.
3. Better lifestyle
Running a smaller practice will typically allow you more time out of the business to do what you like, providing you have the systems and structures in place to do so. Although I do have clients turning over £2M+ who are also in a position where they have a good amount of time out of the business.
4. ‘Small business culture’
Often smaller businesses can have a nice, ‘family’ culture than some of the larger organisations with 30+ staff lose as they grow. And for some people this type of culture is really attractive.
5. Personal client service
Keeping your practice smaller might mean you choose to work with a fewer number of clients but offer them a larger variety of services. This means you can tailor the service more for your clients.
6. Lower marketing costs (so even more profits…)
If your practice is stable and growth isn’t the goal, you’re less likely to need to spend big bucks on marketing. Having a few decent referral sources should be sufficient enough to replace any clients that drop off.
Not only that, but by not constantly focusing on growth, your focus can be spent much more on things such as delivering an even greater service to the clients that you have.
If growth isn’t the goal, then what is?
So, if growth isn’t the goal for your accountancy practice, then what is?
I would suggest that you focus on these 3 areas (although I’m sure that you can focus on lots more):
1. Maximising profitability
If you’re choosing not to grow, then you want to make sure that you’re maximising your profit.
Some of the ways you can do this are:
- Outsourcing/Offshoring: By outsourcing or offshoring data entry work or even some of the basic compliance jobs, you will lower the cost of doing the work. Not only that, but you free time up for your team to focus on delivering even better client service (see point #2)
- Increasing your teams productivity/efficiency: Naturally it’s easier to manage a smaller team than a larger team. By having an A+ team (see point #3) who are all working as productive and efficiently as possible, you’ll increase your practices profits.
- Maximise your fees: If you want more profit on the bottom, then you’ll want to increase your fees on the top. Consider using pricing software such as GoProposal to increase your average fee value and maximise what you can charge.
- Broaden your service offering: Compliance services can be profitable, but by having a broader service offering with more profitable services e.g. management accounts, financial advisory, business advisory – you’ll increase the overall profitability of your practice.
2. Delivering outstanding client service & offering as much value as possible
With growth not being the goal, you need to focus much more on retaining your existing clients by delivering as much value and service to them as possible.
A focus on outstanding client service with as many touch points as possible will be vital to keeping your clients happy and with you for the long run.
So where do you start when it comes to systemising your customer service?
Here are a couple of articles that might help you:
- WOW your new clients and deliver superior customer service by systemising the little things
- Stop assuming you know what your clients are thinking and start monitoring client satisfaction
- Client onboarding 101 – The complete breakdown of why, what and how it’s important for your practice
- The best marketing strategy EVER for accountancy practices (it’s so simple you’ll kick yourself)
As well as systemising your customer service, you will also want to offer as much value to each client in order to keep them ‘locked in’ for as long as possible.
By having a rang of services that they are using e.g. financial planning, business advisory etc – they are less likely to jump ship and leave than if they were just having their compliance work done.
3. Building a self-reliant A+ team
In smaller practices, it’s important that every single member of the team is pulling their weight.
It’s the same in larger practices, although more so when the business is smaller as there is less room to hide.
Make sure that you have a clear organisational chart so that you know where each person fits in and what their role is.
You also want to make sure that each person is an A+ team member. You can do a simple exercise here to find out if they are.
Ultimately, having the right team in place will dictate the amount of time that you can spend away from your practice, so it’s worth investing the time and effort into building the right one.
Is growth your goal?
Do you know what the goals are for your accountancy practice?
Are you looking to grow to £1M+ a year and deal with the challenges that come with a larger, growing practice?
Or are you wanting to stay a bit smaller and run a profitable, tight-knit operation?
There’s no right or wrong answer.
Ultimately, it comes down to what your goals and ambitions are for the future.