How to cope when you experience sudden growthby
Many firms gained new clients during the pandemic, but how are they managing to maintain consistent service levels as they grow? Ahead of her AccountingWEB Live Expo panel, Heather Townsend offers advice for firms experiencing growing pains.
For most firms, it only takes a run of good fortune with new work wins for an accountancy firm owner to start dreading new business calls. But as a result of businesses needing expert help during the height of the pandemic, firms have seen their client base balloon.
As a preview for the panel session, I have drawn insights from how the Accountants Millionaires’ Club members have overcome similar growth struggles.
So, how can you prepare for this situation in advance?
Many accountancy firms run their operation too leanly. This means it only takes a slight upswing in demand and your firm’s operations tend to creak at the seams. If your firm isn’t profitable enough without running it at full capacity most of the time, then it’s time to review your pricing and check your cost base.
Of course, there is no ideal capacity to run your firm, but there needs to be some spare capacity available to cope with these sudden upturns.
Many of our members utilise outsourcing and offshoring to help them with clients’ compliance requirements. This is a great way to have capacity available to your firm if you need it quickly. After all, at the time of writing, it was taking many firms 3-6 months to hire their next team member.
For many small firms, lead generation is a bit hit and miss. There is often no understanding about what the firm needs to do to generate more new business. As a result, new business wins can come as a surprise, which can then lead to unplanned and sudden growth.
The more you review and monitor your firm’s lead generation and what works or doesn’t work, the more awareness you have about the amount of work likely to come in. This can then be planned for in advance, minimising the impact of sudden and unexpected growth.
The last suggestion to prepare for this situation is to carefully plan your capacity and resourcing, such as looking ahead for the next 12 months and in detail at the next three months.
A good practice management system will allow you to see the peaks and troughs in workload. More importantly, this gives you a real sense of how much capacity your firm really has going forward. This gives you the right information to know when you can’t take on more work until you have increased your firm’s capacity.
Guard your headspace and time to work ON the business
When your small firm grows suddenly, there is a requirement for ‘all hands to the pumps’. It’s very common in this situation for the owner of a small firm to roll up their sleeves and get involved in delivering more of the client work. If this becomes a long term change, what tends to happen is the long-term strategic stuff stops. As a result, the following can happen:
- Short-term decisions are taken without considering the longer term impacts
- The firm starts firefighting
- Practice efficiency drops
- The clients who shout loudest get their work done first, rather than those clients whose work should be prioritised
- The firm gets caught out by staff on study leave or taking holiday
In this situation, it is vital to preserve your time to think, plan and review. For example, with the new business you have won, can you say goodbye to some of your unprofitable clients or clients who no longer fit your firm’s direction? What processes can you streamline to increase the firm’s capacity?
Look after your employees and your physical and mental health
Working long hours to cope with a sudden upsurge in demand takes its toll on both you and your staff members. Part of your role as a firm owner is to make sure that your team members are happy and healthy. So, are they taking enough holiday? And have you taken your holiday entitlement since the pandemic started?
Don’t neglect your service levels for existing clients
As a business owner, there is nothing I hate more than our suppliers dropping their service levels to us due to rapid expansion. Despite the best intentions, sometimes your firm will end up with more work than it can handle. In this situation, it’s essential to communicate to your clients about any changes to service level.
Be ruthless on what you and your staff members spend their time on
When your firm experiences sudden growth, it is time to sit down with the team and take out any ‘nice to do’ activities from people’s diaries. In this situation team meetings - as long as they are run efficiently - are actually essential, not ‘nice to do’. It is these team meetings which allow you and your team to take the right decisions and keep the focus on what needs to be done.
Discuss with your landlord about changing your office lease
When you took on the lease for your office, perhaps you couldn’t consider ever filling the office space. But what happens if you need extra team members and there just isn’t room for their desks? You may need to consult with your landlord to see if they can help you. Perhaps there are more rooms in the building which you can utilise? Or maybe they will let you out early from your lease?
Reduce, don’t stop your marketing activities
It is really tempting when you are screaming out for more resources and struggling with over-trading to stop your marketing. However, this thinking can lead to feast and famine – when you have recruited and resourced up, the new work starts to dry up.
Be prepared to turn work away
And finally, there is no rule that says you need to accept every new piece of work offered to you. Many of our members have successfully stopped accepting new work for a period of a few months or over the November to January busy season.
Heather Townsend will be speaking at AccountingWEB Live Expo on 1-2 December 2021 alongside such guests as Rebecca Benneyworth, Peter Rayney, Paul Aplin, Anita Monteith, Carl Reader, Steve Collings, Reza Hooda plus representatives from HMRC.
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Heather Townsend is Founder and Author of The Accountants Millionaires’ Club. She is the author of six books, including The Go-To Expert, and Profitable Pricing For Accountants. The Club has 50+ members and helps its members grow their practice, the low stress way. It will give...