[IMGCAP(1)]It’s that time of year again. No, I’m not talking about another busy season, not talking about staff evaluation season, not talking about marketing season, and I am not even talking about vacation season. I’m talking about goal-setting season. For many firms who are on a mid-year fiscal year, now is the time when you look to the future and decide what your growth goal can and should be for the next 12 months and how you will achieve it. Each year, more and more firms approach the annual goal-setting process with greater precision and strategy, which enables a greater chance of success.
So, if your firm wants to grow 9 percent this year, where will it come from? Here’s an oversimplified example for a 10 partner firm with $10M in annual revenue:
Description | Dollars |
FY ’13 Revenue FY ’14 Goal is 9% Growth “Gap to Goal” | $10,000,000 $10,900,000 ($ 900,000) |
Above is where most firms stop and it is also why few firms can achieve significant and deliberate growth (The average growth for our industry last year was about 4 percent).
Looking at the equation a little more strategically, let’s dig in and see what this hypothetical firm really needs to do to achieve a 9 percent growth goal:
Description | Dollars |
“Gap to Goal” to hit 9% Growth Losses from Attrition/One-time Projects is 10% Revised “Gap to Goal” Fee Increases of 4% on Remaining Base of $9M Revised “Gap to Goal” | ($900,000) ($1,000,000) ($1,900,000) $ 360,000 ($1,540,000) |
Above is where even more firms stop and throw up their arms at the magnitude and perceived lack of achievability of their growth targets. Based on a 10-partner firm, each partner would need to drive $154,000 of new revenue for the firm to hit 9 percent top line growth! Most of us would be lucky if we had just one partner in our firm who is capable of this number.
To get a feeling for what is realistic from our partner group, the firm created the following revenue matrix for the partner group. It’s based on the numbers each partner can realistically put on the board:
Description/Internal Partner Efforts | Expected Dollars |
Revised “Gap to Goal” to hit 9% Growth Partner 1 (rainmaker - $175K) Partners 2-4 (mistmaker - $80K each) Partners 5-8 (client service partner - $40K each) Partners 9-10 (client service partner - $10K each) Total Partner Efforts Revised “Gap to Goal” after Partner Efforts | ($1,540,000) $175,000 $240,000 $160,000 $ 20,000 $595,000 ($ 945,000) |
We’d like to thank the partners for their efforts, but as you can see the partner group is light on rainmaking ability. There is still significant goal to achieve. Look below at some additional internal steps this firm is planning on taking to meet the “gap to goal.”
Description/Internal Non-Partner Efforts | Expected Dollars |
Revised “Gap to Goal” after Partner Efforts Manager 1 (future partner ~2 years - $80K) Managers 2-4 (future partner ~4 years $25K ea.) Manager 5 (just made manager - $10K) Staff/Seniors/Admin (all combined) Total Internal Non-Partner Efforts Revised “Gap to Goal” | ($ 945,000) $ 80,000 $ 75,000 $ 10,000 $ 100,000 $ 265,000 ($ 680,000) |
Thanks to a boost from of our non-partners, we are chipping away at the goal quite well! However, much work remains. Take a look at what else this firm is planning on undertaking to achieve its goals:
Description/All Other Efforts | Expected Dollars |
Revised “Gap to Goal” after All Internal Efforts Lead Generation Campaign Hire a BV and Lit Support Consultant Hire an International Tax “future partner” Hire a Business Developer/Salesperson Launch a new Service Line TBD Total All Other Efforts Revised “Gap to Goal” | ($ 680,000) $ 50,000 $ 150,000 $ 150,000 $ 250,000 $ 80,000 $ 680,000 $ 0 |
Congratulations! This firm has created a precise plan to achieve its growth goal of 9 percent and had to look externally to fuel all the growth that would fulfill its plan. There is certainly the chance that any of these planned initiatives may drive more or less dollars than plan, which is why it is so important to at least get the gap to goal to zero. Some firms go beyond zero to create extra insurance for achieving their goal.
Now go close your “Gap to Goal.” I’d like to encourage each of you to set and then dissect your growth goal in this matter to see if you can accomplish it internally, or if you will need a combination of internal and external efforts. Once you have set a course and built reasonable strategies, it will become implementation season before you know it.
Art Kuesel is the president of Kuesel Consulting where he helps CPA firms perfect their growth strategies and actions to drive revenue in the door. He can be reached at
