Over the years, the accounting industry has undergone many significant changes when the growth parameters are considered. With continuously evolving marketing trends, it is crucial for an accounting firm to keep apace and put diligent efforts towards growth. We usually witness that some accounting firms are achieving their targets and making profit at a faster rate than others. Let us learn about how they are accomplishing the same.
Analyzing the bigger picture of the industry
• The accounting sector is considered to be comparatively conservative when we talk about investing in marketing. According to a study that evaluated five major segments (Technology, Consulting, A/E/C, Accounting, and Legal), Accounting & Finance ranked fourth when it comes to adopting marketing strategies.
• With the modernization of the market, new challenges have been introduced. Here are the top five as per the studies:
1. Shortage of appropriate talent – 49.1%
2. Downward price pressure on services – 48%
3. Commoditization of services – 48%
4. Automation/Artificial Intelligence – 43.4%
5. Increased competition from new firms/competitors – 33.1%
• Buyers today prefer to go online while finding an accounting service provider. Statistics show that there is 68.5% probability of a buyer to opt for digital channels while evaluating a firm, with only 31.5% probability of using traditional methods.
• According to a study, the high-growth firms achieved a 20% or greater compound annual revenue growth rate over a period of at least 3 years. While the rest experienced average or no growth, 29.7% of firms met this standard.
Factors hindering the growth of an accounting firm
Growing an accounting firm is not an easy task. It requires constant efforts and the right strategies in place. Here we have discussed some factors that prove to be a hindrance in the path of their growth:
Being complacent is the most critical factor that leads to the stagnation of an accounting firm. Being too comfortable with the recent business status is not the right approach for growth.
Hence, an accounting firm should always try to build up a competitive environment and facilitate behavior for further business growth.
2. Investing in the wrong areas
Often we witness firms investing their time and resources in the wrong areas which do not generate profitable results in the long run. Such firms are either poorly measuring their business outcomes or are unable to evaluate effectively what is working for them and what is not.
High-growth firms utilize their resources efficiently and continuously analyze the outcomes of their investments.
3. Lacking proper direction
In their start-up phase, many firms do not have a clear idea of where they wish to grow or what makes their firm unique. When an accounting firm lacks individuality, it affects its clients wrongly and creates an impression that the firm is inefficient in its work.
High-growth firms are visionary and have a clear idea for their growth.
4. Lacking commitment
When it comes to low-growth firms, we see that they often lack commitment toward their work. Promises are not kept, and they make excuses for their lack of seriousness. Accounting firms that wish to grow but are not committed to the strategies or steps necessary for the same, will never see the results.
High-growth firms, on the other hand, stick to their commitments and follow their growth plan diligently.
5. Not setting the right expectations
It is important to inculcate the desire for growth, but it is equally important to set the right expectations for the same among partner staff. You must have a clear idea of how your partners will contribute to your growth plan, and the same should be communicated to them.
High-growth firms structure their internal culture around a strategic growth plan and nurture their staff’s skills according to these expectations.
What sets the high-growth firms apart?
When compared to their no-growth counterparts, following are some steps and methods that high-growth firms adopt for their success:
1. They invest more in marketing
Analyzing the high-growth firms, we see that they keep a comparatively higher budget for marketing than their no-growth counterparts. In fact, studies show an increased correlation in the marketing expenditure of a business and high performance.
2. Establishing an individuality
Research says that the most crucial marketing strategy of a high-growth firm is related to establishing their individuality in the market. Considering the increased competition in the market, it becomes essential to differentiate oneself as a business for exponential growth. A firm becomes prosperous when it finds a way to do things differently and stand out from the crowd.
3. Focusing on social presence
Search engine optimization and social presence as a whole are becoming increasingly important for any business to flourish. High-growth firms have been seen focusing on the same diligently.
Statistics show that 59.6% of the high-growth firms modernize or redesign their website as compared to no-growth firms which are at 39.1%. Practices like modernizing the business website and search engine optimization help businesses to gain more online leads and create a greater impact on the market.
4. High-skilled subject matter experts
Studies show that high-growth firms invest in high-skilled subject matter experts who can facilitate the growth of the business with their knowledge. They perform better in various aspects of the business and help build a strong clientage. This is because if the subject matter experts are knowledgeable, clients can depend on them and the firm will grow.
5. They create valuable content
Sharing their knowledge by creating valuable content through blogs, webinars, gated content, email marketing, etc. is a method that high-growth firms adopt for reaching their customers in a better way. They invest more money, efforts, and time in the same as they realize that creating valuable content can give them market hold and catalyze their growth as a firm.
Examples of some fastest-growing accounting firms
1. PwC (PricewaterhouseCoopers)
Framed of numerous branches, including accounting and consulting, PwC is an international professional services firm. Its accounting branch comes second in the U.S based on revenue.
2. Ernst & Young
In 2012, this company was recognized as one of the best accounting firms to work for by Vault. Supporting its dedicated employees, this company makes sure to establish a growth-focused work culture.
This company is the top-earning accounting firm in the U.S. and has a specific branch for accounting services named Deloitte & Touche LLP.
This organization has a wide reach through more than 75 American branches and is a major provider in assurance, tax, and other accounting-related services for mid-level companies.
5. Grant Thornton
This company has strategically partnered with international companies in U.K. and Australia and is recognized as the top-ranked accounting firm in various official rankings.
Growing your accounting firm toward high performance and profit requires continuous and collective efforts. As discussed above, it is important to understand that there is a close correlation between marketing and performance, and hence, it is advised to invest on the same as an accounting firm. Focus on acquiring and nurturing highly-skilled staff and build a social presence that can draw more clients to your firm.