[IMGCAP(1)]My friend Al is a sole practitioner with seven staff members and a thriving audit practice, besides the typical tax and small business tax clients. He is getting older, and while he has no plans to retire and is actively trying to grow his practice, he periodically meets with larger firms to see if there is an interest in acquiring his practice when that day comes. By doing this he stumbled on a fantastic business development formula.
A few years ago at his first such meeting he was disappointed to be told his fee structure was way too low to be considered as a merger partner by the larger firm. And then they started referring small audits they could not afford to handle. Not wanting to turn down the referral source, they recommended Al.
In the four years since his disappointing meeting he was referred seven audits that he now does annually, along with some tax return preparation, consulting and even QuickBooks fix-up work. He has since met with four other firms with similar results and has added two staff because of the additional work. He also handles not-for-profit organizations and 401(k) and pension plan audits. This is pretty impressive for a one-owner firm.
This is an unintended consequence of his low fee structure for higher-quality work. His quality is there and recognized because one of those larger firms performs his peer review, at a discount too.
Sometimes really good things happen to nice people who know how to manage, train, supervise and deliver quality services at reasonable fees, and who see an opportunity and grow from it.
Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People List. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, published by www.CPATrendlines.com and “Managing Your Tax Season, Third Edition,” published by the AICPA. Ed also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com. Art of Accounting is a continuing series where Ed shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. Ed welcomes practice management questions and can be reached at (732) 964-9329 or firstname.lastname@example.org.