As amateur ichthyologist Woody Allen told us all in Annie Hall, sharks will die if they stop moving forward — but that doesn’t mean that all sharks need to swim flat-out at their fastest pace. Some may be perfectly fine ambling along at a modest speed, snapping up the occasional swimmer, while others need (or want) to plunge full-speed right into the middle of the biggest school of fish they can find. It’s best, therefore, for the individual shark to assess their appetite, their metabolism, local fish stocks, and other oceanographic details, and to adapt their speed to those.
This long (and labored) metaphor sprang to mind after I attended a firm retreat earlier this year, and was fascinated to see the partners debating what level of growth the firm needed to pursue, which meant thinking deeply about both the future and what kind of practice the partners want. Meanwhile, we regularly hear from small and sole practitioners who aren’t interested in growth at all; they’re just hoping to coast along until retirement.
Unfortunately, unless you are literally retiring tomorrow, coasting isn’t an option anymore. No matter what kind of practice you’re in, forward momentum is a necessity these days. Even if you’re not specifically chasing higher revenue, you need to at least jog along to keep up in a number of areas, and it turns out that growing is one of the best ways to do that.
- You need to perpetually renew your client base. If you’re near retirement, your clients probably are, too, which makes them less attractive to anyone who might buy your practice. That can directly diminish your retirement, so you’ll want to constantly bring on new sources of revenue.
- You need to reward staff, and offer them more opportunities. An aging employee base is as unattractive to buyers as an aging client base. To get new staff (and keep your old ones), you need to offer them competitive pay, as well as spots to rise into, which may require expanding both in size and in your range of services.
- You need to keep up with technology. This isn’t just about educating yourself on the latest release of your accounting software. More and more, it’s looking like the accounting profession is entering a period where it will need to make serious investments in new software and tools and training, as cybersecurity concerns grow, and artificial intelligence, blockchain, machine learning and robotic process automation begin to reshape the profession’s traditional services.
- You need to keep up with the competition. Not only are your fellow firms looking to snap up your clients (and your staff), players from outside the profession are eyeing its loyal clientele and figuring out ways to offer them similar services, often at lower price points.
For all these reasons and more, firms need to be moving forward, even if they’re comfortable with what they’re currently earning. For some, the growth they need can be achieved with a modest increase in fees; for others, it may require a concerted strategy of new services, more rigorous business development, better cross-selling, and even M&A.
The point is to start assessing what kind of growth is needed, and then to use that as the basis of a formalized plan to meet that need. Sharks, in the end, keep moving forward purely on instinct. Accounting firms won’t.
Note: Knowledgeable killjoys have informed us that, technically speaking, not all sharks need to move forward to survive — but we’re not going to let reality spoil a good metaphor.