Building Your Firm with the Five Pillars of Practice Growth

Building a professional or financial services firm today requires a balance of multiple strategic activities. The first step in building your firm is to develop a strategic growth plan. Your plan will reflect your hopes and dreams for your company in both the short term and the long term. You will set measurable and achievable goals. You will involve the leadership of your company in your business growth. Finally, your growth plan will incorporate an appropriate blend of the five key business growth strategies – what we might call the five pillars of practice growth.

The Five Pillars of Practice Growth are vital pathways to practice development. Each firm will need to discover the optimal combination of these strategies to achieve their vision for the future of their firm. In choosing the most appropriate combinations of the five pillars you will want to consider the culture of the firm and the ability of the current staff of the firm to execute plans in each of these areas.

The Five Pillars of Practice Growth are:

1. Merger and Acquisition. Merger or acquisition of firms can achieve several significant goals relatively quickly. It is likely that finding the right business for merger or acquisition and completing all legal and financial requirements will take more than twelve months. This can be faster, however, than waiting for other strategies to play out fully.

Merger or acquisition can offer a viable solution for several needs:

·         Growth

·         Addition of new services

·         Addition of an important niche

·         Succession

·         Management issues

There are three kinds of merger to consider. You can merge your firm up into a larger firm. You can merge a smaller firm into your firm. And, frequently overlooked, you can effect a merger of equals for mutual benefit. Acquisition can also work both ways. You might decide to sell your firm or your book to another practice. Or you can acquire a smaller firm that offers niche specialization, a successor, or greater breadth or depth to expand or enhance the services currently offered by your firm.

2. Partner Search. Bringing in a new partner, particularly a partner with a book of business, is another way to grow your practice.  You might need to bring in a partner at any level from junior partner to managing partner. You might need to bring in a partner who is mid-level in experience in order to train and mentor that person to become the next senior partner of your firm. Bringing in a partner with a book of business can accomplish many of the same things as mergers:

·          Growth

·         Addition of new services

·         Addition of an important niche

·         Succession

·         Management issues

3. Niche Development. Developing a niche is a wonderful way to bring in new clients and to sell additional services to existing clients, increasing client spend with your firm. Your firm might be mature enough to be ready to think about greater specialization. In this case, you might be planning to develop a lucrative micro-niche (in which you would charge premium pricing) or even a boutique business within your firm. This level of specialization would eliminate competition because no one else would have the comparable combination of knowledge, experience and training, nor would the large firms be able to compete on price.

Niche development is a very potent way to grow a practice because the niche clients often need the more general services of the primary firm, and conversely, general clients often need the specialized services of the micro-niche business.  Clients tend to like one-stop shopping.

4. Training and Development. This is probably one of the most commonly overlooked strategies for practice growth, and often one of the least expensive. Investing in the future of your firm by providing training and development for your staff is a good strategy for accomplishing several practice development goals:

·         You are more likely to keep the most competent members of your staff.

·         You can develop the leadership you need for the firm, both now and in the future.

·         You cultivate your replacement when you retire.

·         You develop the knowledge and skills to build new micro-niche businesses.

·         You build the breadth and depth you need for the future

·         You do not have to worry about the culture issues that can occur when you are adding partners or other firms

·         You enable the firm to grow strategically in order to compete aggressively for new clients and to carve out new specialties in which there will be no competition

5. Advisory Services. We define advisory services as the additional services and products you add to your portfolio in order to increase walled share from current clients. Accountants are among the most trusted professionals in our society. It should be very comfortable for your clients to obtain other products and services from your firm.

There are two primary methods of increasing wallet share with existing clients. The first is “up-selling.” In this case you will sell a similar and more expensive service to the client, moving the client up the price spectrum. Moving a client from general services to a boutique business will also be a way of “up-selling” because boutique services are generally offered at premium pricing. The second method is “cross-selling.” With this method, you sell new services to your client. This might mean providing encouragement to a business client to bring personal accounting to your firm from a competitor.  Similarly, it might mean learning of a client need in routine conversation and selling the appropriate service or product that can help the client solve the problem.

Some of the benefits include not having to find additional clients to increase revenue. Your firm incurs significantly higher cost to make the first sale to a new client as opposed to selling additional services or products to existing clients. It also saves a great deal of time for the firm. Finally, it allows your sales and marketing team to focus on new clients while you up-sell and cross-sell to existing clients.

Together the five pillars of practice growth can help your firm grow in ways that meet the most acute immediate needs and plan and put processes in place to ensure long-term growth. Together the five pillars of practice growth enable you to build a balanced growth plan for your firm. Finally, the five pillars of practice growth offer the flexibility to build a customized growth plan that maximizes the skills and culture of your firm.