You have all heard time and time again at conferences, via industry associations and through your colleagues that in order to grow your CPA practice and not be vulnerable to the inherent risks of a commodity-based business, you must transform your practice by offering not only financial advisory services but also providing business consulting services. Still, many of you have not made the transformation. Why is that and what is holding you back?
We all know that clients can quickly switch their accounting firms and that many CPA firms struggle with finding new revenue streams or maintaining their existing ones. One of the most profitable areas of potential growth is through business consulting services; this not only adds additional revenue but improves retention among your clients. Now is the time to make the change, as the CPA firms that have already focused on this opportunity have demonstrated the ability to win new business.
There are probably many reasons that you have not transformed: too busy running your day to day business operations; unsure of how to migrate to this new business model; don’t feel clients are looking for business advice, and regulatory and litigation climate. The suggestions below should help you get started in making the transformation.
1. Understand your client profile. Showing that you have a thorough understanding of your client's business will go a long way in gaining credibility with them, so make sure you learn their industries inside out and recognize the issues that challenge them. Taking an interest in your clients' businesses not only provides them with the tools they need to succeed, but also creates the opportunity for you to become a specialist in a given field. You'll be in a position to advise clients much more accurately, help them make better-informed decisions and provide specific financial advice they can trust. By delving into the niche industries, you not only become a business partner, but also a knowledge partner.
2. Hire or partner with industry experts. If you put in the time and you're still having trouble wrapping your head around your client's business, tap into your network and find someone who does have that expertise to help you (and your clients) get to the next level. Industry experts can supplement your understanding of the industry, and define the specific benchmarks by which your clients can run their business. Industry Associations are a good resource for finding benchmarking data and state of the industry reports.
3. Build a step-by-step plan to engage with your clients. Once you understand the criteria for your client's business, implement a collaboration platform that provides daily or weekly insight to their business operation and alerts you and your client to any gaps in performance. Drawing up an effective business plan that helps your client grow to the next level will not only show clients what they can do and the level they can reach with your help, but it also demonstrates that you understand where they’re coming from. With a great plan in place, you’ll start to see what form your support and insight can take, whether that's offering industry-specific expertise or identifying operations that could work more efficiently. Alternatively, your value could lie in just acting as a sounding board for your client's next big idea. This kind of approach will help to cement your position and begin to define you as a trusted, integral partner over the long term.
By following the steps above, you will begin to build relationships with your clients that center on business advisory and sets you apart from your competitors. The implication of not doing this? You risk becoming irrelevant as other accounting firms move to this model and promote their industry expertise to the small business community.
Dave Lechleitner is currently the product marketing principal for Exact’s U.S. Cloud Solutions. Dave also serves as the chair of the Software Technology Council for the Fabricators & Manufacturers Association. He has been in manufacturing for more than 20 years and is considered a thought leader in the industry. Dave is a senior enterprise resource planning (ERP) professional with extensive pre-and post-sale consulting, presales and management experience, in addition to vast experience in cost accounting and deployment of ERP solutions at all levels of a manufacturing enterprise. Dave is certified in lean manufacturing and frequently speaks about the topic nationally to help small manufacturers become lean.