Productivity and efficiency have improved dramatically with improvements in Information Technology moving in leaps and bounds. Less than a decade ago no one had heard of iPhones and now most of the population have one evening queuing in the city streets, sleeping overnight to buy the latest update. Astonishing! Crowd funding is gaining momentum as a real financing strategy for new projects – amazing. Is your practice on to this strategy for your clients?
We are finding more and more, firm’s new efficiency levels are presenting new challenges – what to do with idle resources. WOW – what a great problem. This is the time to focus on ‘higher value’ advisory service: financial planning, strategic planning, succession planning, CFO advisory, board advisory, etc. This is time to really focus on your client’s needs.
Leverage is a focus of many to maximise returns – unfortunately for many we are still learning what this actually means. Working smarter is about identifying niche markets and clients and leveraging up with systems, pricing and skilled staff. It can be done! David Maister (international professional services guru, author & speaker) is an obvious example of someone who has leveraged on price or value. He is a sole operator who I understand earns an income that most professionals would only dream of. On the other hand there are now many sole practitioners who have leveraged staff to 30 and more per partner, utilizing very tight systems and procedures and I suspect in the very near future this will become the norm.
Leverage of staff to partner is one of the key drivers and the most recent the Good, the Bad & the Ugly Report reveals that the top 25% of firms had leverage of just 8 people per partner. Oddly this hasn’t changed in many years suggesting that many firms are still bogged down in the quagmire of daily operations and haven’t yet grasped the big picture potential. There are enormous improvements on results to be obtained just through properly focussing on this one lever and many firms are already proving this.
A firm we recently worked with had productivity in the high 90%. How is this possible? The answer lies in significant write-ons and leverage from higher-value advisory services
For those who want to build a business of value, rather than a stream of personal income dependent upon hours and hard work, a shift in thought processes needs to take place. Unfortunately this is unlikely to come from within the firm – external stimulus is usually required. The potential for a new generation that is more entrepreneurial and prepared to invest in the future is really quite awesome!
Our marketplace is now flooded with consultants who claim to have instant solutions, software, tricks and treats and magic wands to improve results for accounting firms. Why has this happened? Perhaps the answer lies in a very large part simply because practitioners do not allocate enough time themselves to focus on good strategies instead they are spinning on their wheels with operational issues and often trying to deal with too many issues at once.
The demand for good practices currently exceeds supply. Many firms have branched out into new services especially financial planning and it will be interesting to observe the long term effects that this will have.
One of the most significant elements being missed by many practices is the focus on delivering technical services, rather than focusing on the total needs of the client. The result of this technical service approach is a very poor ‘all firm approach’ or ‘cross referral approach’ that continue to be poorly executed by many accounting firms. Firms across the country are missing significant opportunities to provide greater value to their clients and of course missing significant new revenue opportunities.
It is also most puzzling to observe in this same report mentioned above that growth of accounting firms is in the range of 3% – 6%. Once again, this is simply astonishing! Quite clearly firms in the main are not actively focused upon seeking new business and new services with proper plans – perhaps because they currently feel overworked and have not yet really come to grips with the concept of leverage and how to achieve it.
If your firm wants to embrace ‘change’ and ‘growth’, beyond current levels, we recommend our Advisory Thought Leadership Program.
Author: ATL Network.