[IMGCAP(1)]As I take inventory of my client meetings lately, one topic clearly rises to the top: “How can we best fuel growth?” Clearly, some firms have figured out the formula… All you need to do is look at the 2012 Accounting Today Top 100 list and find those firms posting 8, 9, 10 or more percent revenue growth over prior year. From my experience, they are not relying solely on one strategy to be able to put those numbers on the board. In fact, they are employing many strategies and tactics at the same time to achieve those numbers.

To see how a firm might build a growth engine to accomplish 10 percent growth, consider the chart below. Our firm today is a hypothetical $20M firm with 150 total people. The challenge is to grow 10 percent in one year. See below for how each element of the engine contributes to growth.

Growth Engine Components - $20M Firm with a 10 percent Growth Goal

 

 

 

 

 

 

 

 

 

Component

Description

Contribution

  1. Basic marketing training for everybody in the firm

Give everybody the basic tools and training to succeed with their personal marketing endeavors. Then, create an environment of support and encouragement.

0.75% or $150,000

  1. Coaching for partners with greater business development potential

Nurture those partners who can and should contribute more revenue growth

1.5% or $300,000

  1. Stronger client relationships

Boost loyalty, additional services, and revenue on a per-account level through a targeted relationship development program for top clients

1.0% or $200,000

  1. Better pricing and billing strategies

Maximize pricing on a per-client basis, minimize write-offs, and strategically raise rates wherever you can

1.0% or $200,000

  1. Hire a business development executive

Hire someone dedicated to opening new doors and finding new opportunities for revenue

2.0% or $400,000

  1. Niche marketing efforts

Implement targeted marketing outreach using a top criterion for firm selection: industry experience

0.75% or $150,000

  1. New service lines

Explore new services that your firm should be offering - but isn’t

1.0% or $200,000

  1. Partner lateral hires

Identify top talent (partner/senior manager level) in your marketplace that should be on your team driving revenue in your door

2.0% or $400,000

  1. Strategic mergers

Identify merger candidates based upon their ability to deepen or broaden your service offerings, add marquis clients to the board, or expand into new geographies

 

25% or $5,000,000

TOTAL

 

Without mergers

10% or $2,000,000

With mergers

35% or $7,000,000

 

 

This chart shows us that, in fact, one single type of marketing or sales effort cannot possibly drive significant growth for a firm of this size. The contribution from each component may be higher if the initiative is wildly successful, and could be zero if the effort flops.

And remember, this doesn’t begin to account for clients who leave your firm – creating the need for even stronger numbers.

The bottom line? Many firms today simply do not have enough “irons in the fire” to put significant numbers on the board. So, if you are wondering where your growth will come from this year, consider what our hypothetical firm is using to hit their growth numbers. Then, build your own plan, chart it out, and add it up to see if you have enough components working together to achieve your goal.

Art Kuesel, director of practice growth and marketing consulting services for Koltin Consulting Group, helps CPA firms across the country hone and maximize their growth plans, build effective marketing and sales efforts, coach partners and managers to greater success and add revenue to the top line. Koltin Consulting serves CPA, law and financial advisory firms with strategic growth, M&A services, executive recruiting and management consulting services. Art can be reached at 312-662-6010 or akuesel@koltin.com.