When growing your practice is NOT the solution you need

Aug 9, 2022 | Strategy

Many management consultants would argue that if your practice fails to grow it will stagnate. Is that true actually? I think it depends on what one means by ‘grow’.

Grow the client base? Turnover? Profits? Range of services? Efficiency?

I prefer the word ‘evolve’ as I’ll explain below.

Many years ago I was headhunted to join BDO as a partner in London. At the time the firm claimed to be ‘Expert Advisers to Growing Businesses’. And, back then, BDO was the only firm claiming to specialise in advising ‘growing’ businesses. At least it seemed like a specialisation.

I quickly learned it was a clever variation on the still common claim by many accountancy firms to specialise in SMEs.

And that really is NOT a specialism. It can’t be. Over 99% of all UK companies are SMEs. In the same way, almost any decent business client will be a ‘growing’ business. But, back in the 1990s no one else was talking about growing businesses (hard to believe, but it’s a fact). And BDO’s thinking at the time was that if a business didn’t want to grow why take them on as a client? Failure to grow would mean a business would stagnate.

Smaller accountancy firms are different. This is due to the extent to which most of your clients come back year after year.

Many of the sole practitioners I know are not looking to grow their practice as such. Once they have built up to a decent level of recurring fees they are quite comfortable and have no continuing ambition to grow their client base or turnover.

This is certainly true of some of my clients who have already built up a ‘nice-sized practice’ that feels right to them.

Of course all such accountants continue to win occasional new clients and these pretty much balance out the odd client who sells up, retires or dies.

Rather than seeking more clients (a common measure of growth) these accountants often want different things such as:

  • increased profits
  • improved cashflow
  • better behaved clients
  • more advisory vs compliance work
  • maintain turnover but generating higher fees from a smaller number of clients
  • moving old legacy clients onto more commercial fees
  • freeing up more time so they can focus on doing what they enjoy, or
  • learning how to run the practice differently and so reduce the stress and pressure involved.

This is why I suggest that ‘evolve’ may be a more accurate ambition for your practice rather than to ‘grow’ it.

Indeed, almost every accountant I have worked with wants to evolve their practice in one way or another.  And if you are one of those with big growth ambitions I would encourage you to move from dreams to plans. It’s fine to have ‘Big Hairy Audacious Goals’, but just hoping and wishing that perfect high fee paying clients will suddenly appear is not a strategy.

Some of the accountants I have worked with tell me that they have developed the confidence to adapt how I work with them to offer more billable strategic business advice to their own clients.

That’s the thing. These accountants want to evolve their practice and client base. How you might do this depends both on where you are now and where you want to be in a few years time.

Continuing to do what you’ve always done may not be enough to allow you stay in practice, making the same money and servicing the same clients. Does your practice need to grow or to evolve?

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