While progressing your practice to offer a complex advisory service is a pathway open to all, it’s also one that, for various reasons, some practices may not choose to take.
What’s important to realize is that there is an opportunity to be successful at each step on the pathway, and success isn’t defined by how far you make it along the advisory journey. It’s equally important to be able to recognize your strengths and identify areas where you can add value to your community with the services you currently provide. Your practice may specialize in budgeting or tax compliance, and you may have carved out a nice niche for yourself in this space. If that’s your bread and butter, and you’re comfortable there and there’s capacity to grow (if that’s what you want), then keep at it.
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There’s no requirement to add to your workload if it won’t improve your practice, your home life or add value for your customers. The key is to work smarter, not harder.
There are a few reasons why it might make sense for a practice to stay at the first step of the advisory journey:
1. Improve your work-life balance
The very reason people often leave larger businesses is to achieve (or get closer to achieving) the work-life balance sweet spot. I’ve spoken to many accountants and bookkeepers in smaller practices who have followed a similar path. They started off in a large firm at the bottom of the food chain, before progressing slowly up the ranks. After putting in several years’ worth of hard yards, pushing 60-to-80-hour weeks, they burned out.
Then, in an attempt to find a more balanced lifestyle, for their own health, mental wellbeing or for an improved home life, they decided to go out on their own and start up a small firm. Working for yourself really is appealing when you feel like you’re chained to your desk and driving profits for someone else.
What they find if they’re not careful, though, is that their work-life balance is actually no better than it was before. Many find that they’re actually working harder and working longer hours in their own practice than when they were an employee at a large firm. When you have to find and retain clients and drive every dollar that you earn, the stakes really are raised. So they put in those long hours, hoping that things will eventually level out.
If work-life balance is a priority, evolving your practice to offer new services may not be the best way to achieve this goal. Becoming proficient in your new offering will no doubt mean spending countless hours on professional development -- and then you’ll need to consider the time and effort you’d need to put in to marketing your new service.
If you’re happy with the status quo and unwilling to sacrifice your work-life balance (and I don't blame you!), there are other avenues you can take to improve your business’ profitability and increase your client base.
2. Be the expert
Everyone knows the saying “Jack of all trades, master of none.” While increasing the number of services you offer is an opportunity to tap into your practice’s potential, it’s not the only way to improve your offering -- becoming a specialist in a particular area offers another opportunity. Whether that’s simple advisory -- budgeting, forecasting -- or by choosing one or two complex services to specialize in, it’s possible to improve your practice without overextending your service menu.
Take a look at the number of businesses out there that exist solely to calculate personal income tax refunds each year. Near the end of every financial year, we are swarmed by commercials promising to take away the hassle of doing our taxes, for a small fee.
There are two things that businesses like these are doing to successfully to offer just one service. Firstly, they have identified a service that consumers want -- who doesn’t want some of their hard-earned tax dollars back? -- and they essentially charge to perform a task that nearly everyone could do themselves (albeit not as easily).
The other way in which they are effective is in their marketing. Through channels such as radio commercials and Facebook advertising, they ensure that their target audience knows about them and is aware of their services. They also ensure their clients know how much their service is going to cost upfront.
3. Curate your client base
Another way to drive revenue is to curate your client base. Once you’ve established your practice and found your niche, it’s time to curate a solid client base. Being diligent in how you manage your client base -- targeting the types of clients you will accept and managing out the messy ones -- is an excellent way to ensure your revenue continues to grow.
One way to curate your client base is to choose an industry to specialize in -- a vertical niche. I’m familiar with a few firms that do this really well. One such firm specializes in the restaurant industry. They were a compliance-based firm that really focused on getting their practice efficiency phase nailed. They deeply understood their profitability, and focused on selling more services into that base of budgeting and forecasting before choosing a complex piece of advisory.
This firm identified their complex advisory stream as the restaurant industry. They were very clear on the types of restaurants they wanted, they developed really good industry knowledge and targeted their marketing towards restaurants. They got really clear on their app stack, and were really diligent about their client base -- if they started getting enquiries or interest from prospective clients that didn’t fit in with their specialty, they would refer them to other firms within their network.
This firm’s growth came from the restaurant vertical. They built up expert knowledge, focusing on client referrals and marketing within the same industry, and became the go-to accounting firm for the restaurant industry in their region.
Every business is different, but these methods are effective. It’s all about identifying a key area of compliance or two -- perhaps budgeting, forecasting or tax compliance. Perhaps it’s all three, packaged up into one fixed monthly price offering. Perhaps it’s specializing in a vertical niche. And then it’s about doing those things really well, building up a core clientele and expert reputation and promoting your business as an authority in this area.
