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Growing Accounting Firms
It should come as no surprise that math is the way to build your dream firm. Believe it or not, marketing is not as much of a mystery as it’s made out to be… It can be effectively deployed as long as you follow a simple formula. When you follow this formula, you’ll find a consistent pipeline of high-quality leads, essential for growing accounting firms. Assuming that you’re ready to increase profits at your firm, find the formula for growing accounting firms below.
The Formula For Growing Accounting Firms
Sales. It’s a necessary process that’s gotten a bit of a bad reputation. Why? Because too often, salesmen resort to pushy, over-the-top tactics. We aren’t talking about those kinds of sales experiences. You have to increase your sales to grow your firm, but you don’t have to be a sleazy salesman to get there. You provide a valuable service. You communicate that value to prospective clients. You decide to work together. That’s the sales process we’re talking about.
Now that we’ve gotten that out of the way… The first thing you need to do is set a sales goal. Let’s say you want to add $100K to your practice in the next year. Now, you need to decide the desired value of your average client. For this example, we’ll say that we want our average client to be valued at $10K. Now we know, we need ten clients to reach our goal.
10 Dream Client x $10,000 = $100,000
That’s pretty simple math. But, do you actually close 100% of your sales? And, of those that you do close, how many come from referrals? Referrals are a great way to generate new business, but if you’re sitting around waiting on referrals, you’re missing out on opportunities with your dream clients. That’s where proactive accounting comes into play.
Growing accounting firms is a fairly straightforward process, if you follow the proactive accounting approach. And that approach does not rely on referrals. If you really want to transform your firm, you’ll have to change the way you think about marketing and sales. Employing a lead generation strategy should be your first step.
Lead generation is an effective way to get more clients for your accounting firm. However, don’t expect to maintain your typical closing rate. When you’re casting a wide net, not everyone that connect with will be a dream client, not everyone will want to sign with you, and not everyone will have the budget to pay for your services.
So, let’s take another look at our equation… You have a goal of $100K and you need 10 clients, valued at $10K to get there. It’s time to factor in a realistic closing rate. If your lead generation messaging is effective, and if you approach sales calls/meetings prepared, you can expect a closing rate of about 25%. With that in mind, you’ll need 40+ booked calls or meetings with your prospective clients to achieve your revenue goal.
One Lead a Week = $100,000 In New Profits
Growing Accounting Firms with High Quality Leads
Generating 40 leads over the course of a year is not an incredibly difficult task. An average of about 4 leads a month, one per week, is the way to reach your $100,000 growth goal. One booked call a week… and your dream firm is around the corner. But, what about the costs?
Time Is Your Most Valuable Resource
How much of your time will be involved in generating and selling these leads? Your time is your most valuable resource. It can’t be traded or repaid. It’s there and then it’s gone, so protect it. In this process, we protect your time by assigning it a monetary value. In this case, we’ll use $100 an hour as our cost per lead. You can assign whichever value you feel is accurate, but be careful not to undervalue your time.
Now, let’s focus on your hourly rate for a client. If your hourly rate is $200 an hour, and your cost per lead is $100 an hour… you’re losing money because you’re losing time. If you’re spending your time generating leads, growing your accounting firm will be much more difficult. How do you make this equation work? You set up a lead generation system.
Lead Generation Systems That Add To Your Time
Removing yourself from the production process is essential for growing accounting firms. Let’s take another look at our formula. Our cost per lead is $100. We need 40 leads, which means we need to invest $4,000 of projected costs and $4800 of your time. $8800 to reach a $100K goal seems like a fair trade. But if you don’t remove yourself from the process, you’ll creat a bottleneck.
When you handle the lead generation, the sales, the onboarding, and the fulfillment, as soon as you have two or three clients booked, you’ll find your time is no longer available to invest in new clients. Your time is not free, and it is not readily available. For the math to work, you need to take steps to protect it.
Math is The Path To Growing Accounting Firms
Whether you’re goal is $100K in new revenue or $500K in new revenue, these principles remain the same. Analyze your sales processes. Determine how much time you spend generating new clients and onboarding them. Review every aspect and make sure that your math adds up. And, when you’re ready to start protecting your time, elevating your firm, and increasing your profits, we’ll be here.