Why a Growth Plan Matters
Having a growth plan is essential for any firm looking to move beyond survival mode. Paul emphasizes that there are only four ways to grow a business:
- Increase the Number of Customers – Bringing in new clients.
- Increase the Number of Transactions per Customer – Engaging more frequently with existing clients.
- Increase Transaction Value – Raising the average value of each transaction.
- Improve Efficiency – Reducing costs and eliminating waste.
Understanding and focusing on these four areas provides a structured approach to long-term growth.
Focusing on Efficiency First
For firms focused on traditional compliance work, growth often begins with efficiency improvements. Paul highlights the importance of addressing common inefficiencies, including:
- Waiting – Delays in client interactions and workflows.
- Over-delivery – Doing too much for the money and undercharging.
Paul recommends reducing waiting times and avoiding over-delivery as initial steps to boost efficiency. By tackling these inefficiencies, firms can improve cash flow and increase profitability without adding new clients.
Growing Revenue from Existing Clients
Another primary area for growth is maximizing revenue from existing clients. Start by assessing the quality of your current client base and categorizing them into A, B, and C clients. Then, consider the following strategies:
- Increase Transactions – Offer additional services, such as quarterly tax planning or CFO services, to see clients more frequently.
- Increase Transaction Value – Provide higher-value services that go beyond traditional compliance, like tax planning or financial advising.
By focusing on existing clients, firms can build stronger relationships, increase client satisfaction, and grow revenue without the challenges of acquiring new clients.
Attracting New Clients
If the current client base doesn’t offer significant growth potential, the focus should shift to acquiring new clients. Paul recommends defining the ideal client type to ensure that the firm attracts clients who align with its long-term vision.
Steps for attracting new clients include:
- Define Your Ideal Client – Specify criteria such as revenue size, industry, or growth potential.
- Develop a Marketing Strategy – Use targeted seminars or content that speaks to your ideal client’s needs.
- Craft a Clear Value Proposition – Ensure your messaging reflects the unique benefits you offer.
- Optimize Your Website – Focus on client value rather than generic expectations, showcasing the distinct value clients will receive.
Conclusion: A Disciplined Approach to Sustainable Growth
Creating a growth plan involves more than just identifying areas for expansion. It requires discipline, focus, and a clear understanding of your firm’s strengths. By addressing efficiency, maximizing revenue from existing clients, and attracting the right new clients, accounting firms can set a solid foundation for sustainable growth.
