For many people who enjoy fishing (some 50 million Americans per year!), part of the attraction is the solitary nature of the sport — just you and a pole in the water. That's great if your goal is quiet and an occasional nibble. However, if your intent is to catch as many fish as possible, a lone line can never compare with a large, widely cast net.
I often use this analogy to draw the distinction between the traditional, tactical view of CPA firm growth and the strategic approach required in today's complex practice environment.
A different dynamic
The modern accounting profession dates from 1896, with the introduction of the Certified Public Accountant designation. For most of the nearly 130 years since, the approach to growth has been relatively unchanged. CPAs have traditionally been generalists who grew their book of business by hanging out a shingle and inviting all comers. Success was relatively easy. An encounter at a club, meeting or dinner party would be followed by a polite exchange of business cards and, poof, a client was born!
Prospects were typically limited by geography, which made it easy to plan what I call "banker breakfasts" and "lawyer lunches." Growth was highly individual; practitioners ate what they killed, no strategy required.
While this dynamic operated for decades, its value has been challenged by developments like technology that permits us to serve clients from anywhere. Other factors include greater competition in a mature market, the move toward specialization and the growing presence of private equity in the accounting profession. All these changes are instigating a more advanced growth approach.
What is strategic growth and what's in it for you? The questions are really one and the same — its key attributes mirror the reasons firms should be pursuing it.
1. Strategic growth is sustainable. That's because it operates at the market level. Market conditions are constantly being analyzed and compared, which drives a refined, evolving strategy. It's not about a chance encounter at a Rotary meeting. It's about keeping an eye on the markets and making informed, timely choices and investments in markets which have the most upside potential as conditions shift.
2. Strategic growth is efficient. Rather than one-off lunches, strategic growth leverages market-level distribution channels (the way you and your buyers find one another) to find prospects and land opportunities. For example, it's about finding strategic alignment with a dental equipment manufacturing company, rather than finding out while you're in your dentist's chair that she's looking for accounting help. It's planting a grove of fruit trees rather than plucking a single season of low-hanging fruit.
3. Strategic growth is profitable. Strategic revenue growth boosts profitability, first because you're driving down the cost of sales by specializing in particular markets. Second, deep market insight allows you to create the curated service package the market wants and is willing to pay a premium to get. Third, by driving quantity on the delivery side with efficiency, you boost profitability.
4. Strategic growth is fast. It may take some time to prepare for prime time, but once you perfect your offering and approach, strategic growth is the fastest. You can wrestle an exponentially higher amount of revenue to the ground in less time than it would take to schedule and host breakfast with your local banker.
Ready to leave the pole by the riverbank behind, and get a big net into the ocean? If so, start by learning to apply the principles behind the three elements of strategic growth — service, channel, target. Then prepare to storm the market.
While the skill and experience of the individual practitioner will always matter in our profession, the future is strategic growth — leader-driven and team-based, technology-tethered and geographically dispersed.
