Don’t Measure Your Business Success by Growth Alone
Growing a successful accounting firm requires time and effort. It’s rewarding to realize your ideal clients value your services. This validates your desire to deeply serve your clients while doing meaningful work.
More clients and more money are signs of success. Actually, most accounting professionals place greater value on serving their clients than solely making money. So, you’ll want to figure out the sweet spot for you and your accounting firm. How big do you want to grow?Figure out the sweet spot for you and your #accounting firm. How big do you want to grow? Read full post. #getpaidwhatyoureworth Click To Tweet
Growth places new demands on you and your firm. Processes need to be modified. Systems require upgrades. And, smooth operations reduce stress levels.
The side effects of your accounting firm growing:
- Growth adds complexity. More clients mean more work. Expect breakdowns and bottlenecks to appear. Start to notice where they occur. Then figure out the best way to resolve those issues.
- You hit a scalability wall. There are only so many hours you can work each day and week, and so many projects you can manage. Do you feel stretched too thin? If so, then set time aside to re-evaluate everything. Either you can grow your team or you can scale back on the services you offer.
- The cost of your accounting firm growing. Your expenses increase as your accounting practice grows. As a numbers business you already know that a growth phase often reduces your profits. Plan to spend more money in the short term to increase your revenues in the future.
- A costly oversight. You ignore profitability for the sake of growth. Don’t stretch your finances too thin. Success is messy. Things rarely go as planned. Consider setting up a reserves account to recover from any unexpected setbacks.
Your firm growing without a strategy is like turning a blind eye on an issue which needs your attention.
As you know, the accounting profession continues to change. There are specific things you can do today to remain relevant.You either take charge of your #accounting firm or your firm takes charge of you. Read full post. #getpaidwhatyoureworth Click To Tweet
By the way, many well-meaning people will offer their opinion. Don’t cause your practice to stray from your vision due to external influences. Remember, you either take charge of your business or your business takes charge of you.
Is Your Accounting Firm Growing Too Quickly?
Uncontrolled, and even rapid, growth creates an entirely new set of problems. Some businesses self-destruct because their infrastructure can’t handle the growth. You’ve dedicated too much time and energy to allow this to happen to you.Your #accounting firm growing without a strategy is like turning a blind eye on an issue that needs your attention. Read full post. #getpaidwhatyoureworth Click To Tweet
These problems occur when your firm grows too quickly.
- Finances. If you borrow to fund your expansion, one unpaid invoice, losing a major client, or a sudden decline can leave your practice vulnerable. Calculate how much debt you can handle. Even when your business slows down, you’re still expected to pay your monthly bills.
- Team building. Don’t simply hire someone because you need a spot filled. Carefully consider who you add to your team. Aim for people who believe in your mission and share your values.
- Service delivery. Growth is limited when you’re the only one who can serve your clients. Re-evaluate where you can lighten your work load. Determine which part of your services can be delegated to an assistant.
- System upgrade. Don’t ignore bottlenecks and inefficiency. These issues breakdown once they’re stressed to the max. It’s less costly to resolve these issues early on than to lose highly valued clients.
Your firm’s growth requires you to gradually shift your role from technician to leader. Firm owners are frequently the bottleneck to growth. Where do you hold back?
Size Isn’t Always the Best Solution
Growth is risky business. A strategic growth plan reduces your risk. You gain insights about how to grow beyond your current capacity.
Sometimes a well managed small practice is more profitable than a larger one. Get brutally honest with what you want. Set aside time to take a good hard look at your business profitability, your vision and your resources.A well managed small #accounting practice can be more profitable than a larger one. Read full post. #getpaidwhatyoureworth Click To Tweet
Answer these questions about your growing firm:
- What’s the right size for your accounting firm? How big do you want to get?
- Is your firm growing in the right direction?
- Are you ready to expand and lead a team?
- Where do you need help? Can team members do what you do?
- Are you comfortable training others?
- What do you plan to do with your profits? Reinvest, dividends, pay off debt or charitable giving are options.
- Are you willing to invest profits in infrastructure like staff, outsourcing, training, upgrades, and expansion?
- How will your firm affect your lifestyle?
Decide what you want for yourself and your firm. Is your accounting firm’s growth a challenge for you? Do you want to uplevel your lifestyle? Do you want both?
Find Your Firm’s Sweet Spot
Determine your firm’s sweet spot. That is the point where your firm’s size is ideal and brings in ongoing profitable revenue.
First, find your breakeven point to avoid creating debt. Figure out how much money you need to bring in each month to cover all your expenses. Is your current pricing causing you to work too many hours and robbing you of free time?
Aim for Profits Before Growth
When you discover the sweet spot for your accounting firm, you then control it’s destiny. Review your current numbers, determine the ideal profitable size for your practice, eliminate unnecessary expenses, and concentrate on delivering value to your clients.
Your clients come to you for answers. But where do you go when you have questions? Are you seeking answers to your questions? Business coaching reduces frustration, avoids costly mistakes and saves precious time.
You may decide smaller is better. Especially if you prefer a profitable accounting firm which is less complex and more manageable.
Or, you prefer to go big. If this is you, then the challenge of adapting to new demands is rewarding.
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