Aggressive business development and a heavy investment in marketing and sales initiatives has proven to be a successful strategy for The Bonadio Group, the second-fastest growing firm in the Mid-Atlantic region outside of New York City, and the ninth-fastest growing firm in Accounting Today's 2010 Top 100 Firms ranking.
Based in Pittsford, N.Y., a suburb of Rochester, the firm, which posted revenue gains of nearly 16 percent over the prior year, enjoys being a big fish in a small market - and has plans to keep it that way.
"We are continuing our strategic plan to be the absolute dominant firm in New York State with the exception of New York City," said chief executive and managing partner Tom Bonadio. "We really want to be the No. 1 firm in every one of those major markets in upstate New York."
The firm has offices in Albany, Rochester, Buffalo, Syracuse, Perry and Geneva, and generated $42 million in revenues in its last fiscal year, a sizeable jump from 15 years ago when the firm was bringing in $2 million. Over the last 10 years, it has completed seven mergers and is eyeing another one before the end of the year.
Bonadio said that though his area is a flat market and hourly rates are 30 percent less than average fees around the country, a major advantage is that competitors of his firm's size are nonexistent. There are the Big Four, and below that small, local firms. "That leaves a void and that's a void we've been strategically filling," he said. "It's not a big market, it's not a growth market, but it's our market."
But for a firm of its size, fee pressures continue to be a critical issue, according to Bonadio. "Our Big Four competitors are cutting fees and attempting to recapture clients they ignored over the past few years, and the smaller competitors continue to use the fee card against us," he said. "To combat this, we're going to focus on ways to cement our client relationships, reinforcing our role as trusted advisor, while implementing new client satisfaction strategies and tactics."
In late 2008, when the economy turned, Bonadio ramped up his firm's strategy, bringing in veteran Bob Bunting from Seattle-based Moss Adams to help create a three-year strategic plan. Weak performers were laid off and two new business development executives were brought on to complement the one already on staff. Both had specific goals - one was to handle the firm's new Albany service areas and the other was responsible for researching how the firm could beat out a Big Four firm in its offerings.
"It does not replace our partners from selling," Bonadio said of the boost in its business development practices. "It allows somebody to be selling every day. Partners have other things to do, so when we're busy serving clients, we know there are people out there filling the pipeline."
Another element to the focus on business development was the creation of "Bonadio Initiatives for Growth" or BIG. Executed last year, BIG is a combination of training on sales and personal branding techniques; enhancing awareness of the firm's services among its employees for cross-selling purposes; and an incentive program that centers around rewarding behaviors that promote business development, rather than just revenues.
"For example, we gave rewards to staff who recognized a client's pain and then exercised the right behavior in bringing the issue to the right team," Bonadio explained.
THE YEAR OF THE CLIENT
While the firm put a lot of emphasis on business development, Bonadio said he also focused even more on preserving the happiness and satisfaction of his current clients.
Calling 2010 "The Year of the Client," the firm made sure clients were getting all the services they could render. "We cranked up our service effort on every one of them, especially our top clients, then we made sure everything was delivered on time," Bonadio said. "From a service delivery standpoint, we made an unbelievable effort."
The firm also rolled out a broad survey asking about service and sent it out to approximately 1,100 clients. They received about 300 responses, which Bonadio said gave them some clues on how they could improve.
"We got high ratings from clients in general," he said, adding that 2010 was a tough year, one that saw growth because of the firm's strategy and cost controls, but difficulty in maintaining a bottom line. "But the No. 1 response was bring us more value; show us how you pay for yourself."
A new Personal Chief Financial Officer service has been created for high-net-worth individuals, an offering that Bonadio sees growing into the future. The firm is also focusing on specialty consulting in areas like succession planning, a range of enterprise risk management services, and other business advisory services.
This year's strategic plan predicts revenues just under $50 million, and the next stage, which will end in 2014, is striving for $70 million. With this growth comes new partners, and the firm is looking at how to adjust its infrastructure for expansion. "We have the structuring challenges of how do you govern a firm that's got 50 partners," Bonadio said. "We've got 36; in the next year or two we could have in the mid-40s. If we get to $60 or $70 million we could have 60 to 70 partners. So how do you govern? How do you keep the ball rolling, keep the client service high, how do you deal with partner accountability? Those are the things we are looking at in the next couple of years."
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