How to Spruce Up Your CPA Firm’s Organic Growth

Springtime is the right time to start planting the seeds for healthy top-line growth.

Organic growth: the low cost, low risk answer for increasing internal output and sales and future firm expansion. Every firm wants it, but few truly achieve it. Why? Because the typical CPA firm today commonly looks at the same several sources for achieving internal growth goals: rate increases, cross-selling services, prospecting new clients, and possibly recruiting some experienced talent. But what if I told you that these efforts would never yield the organic growth results you want or need?

Well, they won’t. According to recent benchmarking statistics, the average growth from these sources is just over 5 percent per year. While 5 percent annual growth seems admirable at the surface, in today’s environment, it’s barely enough to preserve your profit margins when accounting for staff raises, competitive PTO packages, and ever-growing investments in technology.

So, if the roots of your organic growth goals just aren’t holding up, it’s time to plant some new seeds to shore things up. Luckily, there are, in fact, several proven strategies for you to consider:

1. Optimize current partner business development efforts

2. Focus a partner on full-time business development

3. Convert a young professional to a full-time business development role

4. Hire an outside business development professional

5. Develop a business development culture

Yes, that is a lot of focus on business development, but keep in mind these strategies are coming from me, a business development coach and trainer, and your new INSIGHT columnist on the subject. So, let’s dive into these highly adaptable strategies a bit more.

Strategy 1: Optimize current partner business development efforts

It’s common for a firm to require a minimum of $50,000 of new revenue per partner per year (if not more). Achieving this can usually only be accomplished with some type of support for each partner and a way of holding them accountable to the firm’s goals. I generally suggest that firms invest in business development training or coaching for their partners and enhance partner accountability through a quarterly check-in meeting and ongoing pipeline reporting. Ideally, partners will continually learn and implement new business development strategies while developing a deeper understanding of if and how their strategies are paying off.

Strategy 2: Focus a partner on full-time business development

If your firm has a partner already generating $200,000 or more per year, imagine what he or she can do with several hundred more hours dedicated to business development. Could that figure double or even triple in a matter of years? The answer is “yes.” If your firm has partners that are particularly successful at business development, I suggest reducing their client responsibilities, so they have more time to generate new business for the firm. Not unlike the partner optimization strategy above, the firm should invest in appropriate development and accountability initiatives to ensure the firm’s goals are achieved.

Strategy 3: Convert a young professional to a full-time business development role

This strategy is potentially two-fold — it can achieve both your organic growth and succession planning goals. What you’ll want to do is identify a manager-level candidate within your firm who already has great relationships with clients, fellow employees, leadership, and in the community or profession. Ideally, the candidate will have already begun bringing in new business. Then, give this young professional significantly more time and training for business development. I suggest you reduce this candidate’s billable hour requirement and assign a revenue goal. A minimum revenue goal of $75,000 is a good starting point and should grow to $250,000 or more within a few years. If the candidate succeeds, you also found yourself a partner prospect.

Strategy 4: Hire an outside business development professional

Often, this is the first strategy considered because we are painfully aware that most other professions and industries employ salespeople. Whether this takes the form of someone who develops leads for you as a contractor, or a consulting firm with a lead generation strategy, or even hiring a full-time business development professional in-house, there are many ways to approach this strategy. In any case, this person will need to be hyper-focused on developing relationships with prospective clients and managing a strong pipeline of opportunities. Generally, this person will need to generate $400,000 or more per year to be a profitable investment for your firm. I will caution you that it can be extremely hard to find the right person who will be successful in this role and fit in at your firm. In fact, many firms make several attempts at this strategy before getting it right.

Strategy 5: Develop a business development culture

What if business development was everyone’s responsibility? That’s the principle behind this strategy. Everyone, from the interns to the managing partners, should be intentional about growth. This usually requires firmwide training on what constitutes effective business development at each level and setting goals for activities across all levels. The core of this effort revolves around the fact that developing better and more meaningful client relationships can be a significant source of client growth — and every person in the firm has the potential to engage in this manner.

While there are certainly other strategies for boosting organic growth, like developing new service lines and bringing on lateral talent, the ideas highlighted here are often considered “low hanging fruit.” Whether you try one strategy or all of them, springtime is a great time to plant the seeds for short- and long-term organic growth.