Availing the E4 Growth MethodTM
Building Exceptional Profitability—Availing the E4 Growth MethodTM
Studying the Accounting Today Top 100 Firms’ growth patterns for the past 3-year period is rather telling. Adjusting for factors like major mergers, such as the CliftonLarsonAllen and CohnResnick fusions and the Plante Moran/Blackman Kallick combination, “top-quartile growers” expanded at a rate of nearly 13% for the past 3-year span; whereas “bottom quartile growth firms” averaged about 2½% during such timeframe. One great aspect of you being CPAs, is that you understand financial principles like the “Rule of 72”—and thus, how these bottom quartile firms are “speeding down the highway of irrelevance”—compared to peers in the top quartile.
As you know, subnormal growth creates lots of other headaches—besides just irrelevance, including:
- An inability to add new partners
- The loss of high-potential staff
- Net-income-per-partner pressures
- Impeding the desire and/or ability to invest in new services
- Creating constraints on funding retirement-related payouts
- Causing roadblocks to remain an independent firm
In short, it can bring about the “death spiral” of your firm.
We’ve talked about two key ways to grow your firm previously—mergers and innovation. Besides inflationary or market fee increases, there are four key ways to bolster your top line—we call it the “E4 Growth Method.” The E4 Growth Method involves your firm’s focus on:
- Essential clients—these are the “anchor clients” of your firm or office… the ones that you’re going to shed real tears over to the extent they depart. They are also the same clients your most hated competitors are plotting right now to steal—or get a share of their professional services “spends.” Having set plans to assure these are the greatest “raving fans” of your firm are essential. Client losses happen in the course of business—you can’t let these be among them.
- Expansion clients—most partners in your firm each likely have a half-dozen or so “expansion clients.” These are excellent clients too, that for whatever reason, are not availing one-or-more of the valuable services your firm provides. Oftentimes, the “reasons” can be a partner’s gatekeeper tendencies—or “busyness.” Identifying opportunities by office “industry teams” or “functional specialists” can be a way of rooting-out prospects.
- Emerging issues—these are regulatory agency changes or accounting body rule modifications that apply to a broad segment of clients. A current example includes the Treasury Department’s new repair regulations. Most firms fail to approach implementation of these “emerging issue” developments in a strategic, cohesive manner—often losing out on a collective multi-million dollar fee opportunity—while simultaneously exposing the firm to malpractice risks.
- External client opportunities—this is self-explanatory in terms of what it is, and the methodology will be discussed further in the “Sales Training and Processes” video.
“Firing-on-all-cylinders” with all segments of the E4 Growth Method can obviously stoke an exponentially positive impact for your firm and you! Please contact us at CPA Growth Partners to arrange a cost-free initial consultation on your situation.