Three Pillars to Strategic Firm Growth for Accounting Professionals
When was the last time you took a good hard look at your firm’s strategic growth plan? Why? Not only is it essential to be developing and implementing a growth strategy framework, but you must also assess the framework regularly to ascertain your firm is on target to its goal. Based on decades of experience with dozens of the most successful firms in the country, we know that a strategic growth framework in the current CPA model is based on three pillars:
- Mergers & Acquisitions ( M&A)
That last one is the newest, which means that if your firm hasn’t re-evaluated strategic growth plans in the last three to five years, it’s time. The goal is that you factor in these three areas for a clear path to achieving growth. Read on to learn more about these pillars and how to chart a future-proof plan of action.
1. Mergers and Acquisitions
Mergers and acquisitions are a tactical mainstay of successful accounting firms. To grow, your firm will acquire smaller firms or merge with firms that are similar in size. Often, leaders seek out firms that either have matching niches or ones that specialize to expand capacity and offerings. And sometimes, they are done to expand the firm, introducing it to a new geographic market. Ideally in M&A, you work with firms which have a culture similar to your own. This will make assimilating easier. Merging with or acquiring firms staffed by like-minded leaders is a great way to grow.
One area in which firms go wrong with M&A is to not give branding enough weight. Successful mergers and acquisitions are publicized with refined messaging. This puts the transaction in the right light for ready adoption in the market. It’s important that M&A doesn’t happen in a vacuum: it is part of a broader ecosystem in which your firm is investing in growth-oriented activities.
Historically, organic growth is the preference of many firms. Essentially, organic growth means growth from within. As you build a noteworthy presence in the market, you let your work do the talking and become known in your area of specialty or for exceptional services. Some firm leaders assume organic growth is the natural consequence of work well done, and sometimes it is. However, in steeply competitive markets, it’s important to not leave growth to chance.
For organic growth, purposeful efforts look like increasing business development, expanding books of business, entering new markets, introducing new services or products, and cross-selling to existing clients. Firm leaders favor organic growth because they feel in control, capable of growing their reputation steadily and somewhat predictably.
This kind of growth largely relies on client referrals and your internal team. And it is often hard to measure and even more challenging to compensate for. What remains unpredictable is how loyal clients will be. As time goes on, organic growth is impacted by the level of ambition of incoming talent, which can be challenging as rising players come from new generations. While organic growth will always be important, it must be accompanied by efforts from the two other pillars, not as the only means by which a firm establishes its footing for the future.
For some firms, it took the disruption of a global pandemic to see the value of strategic digital growth. Now, every firm leader sees the value of digital, mostly because they see the immense risk of not being active and engaged online. Digital growth leverages the power of new technology to connect with new audiences. Data analysis has made it clear that digital is not just a viable revenue source for firms, but an irreplaceable one. Digital doesn’t just bring in small value leads, but can in fact land mega clients. It’s also important to note that every firm leading the pack is investing in digital.
Firms that want to grow fast are combining digital with traditional marketing, taking advantage of every acquisition channel and messaging opportunity. It’s important to remember that digital is more than just having a website; it is a way to connect in a world where consumer behavior is changing. Every industry is moving toward personalization, and accounting should not be left out of that shift. Individuals in every generation, at every socioeconomic level, are increasingly reliant on digital as a means to communicate, shop, work, get educated, be entertained, and operate their lives. Virtual and hybrid are the future for everything from networking to industry events. Accounting firms should be participating in both.
The good news is, digital is trackable. This means that you don’t have to fly blind into digital transformation; you can set measurable goals and monitor progress and redirect where/when necessary. Digital is not going away: the world is online, and firms that don’t invest in digital will miss a major opportunity to impact future growth.
Building a Growth Framework for Your Firm
Every firm is different, but these three pillars will always be essential components of a quality, stable growth strategy. You may immediately see gaps in your own approach, or you may suffer from a lack of growth that lives in your blindspots. At Winding River, we are working directly with firms to upgrade everything from SEO on the website to firm and partner LinkedIn profiles. Winding River Consulting provides consultation and coaching and helps develop the ultimate growth strategy framework for firms in every market. Reach out to learn more.