How Can Local CPA Firms Expand Business?
By Analytix Editorial Team
October 11, 2017
For any business to succeed and expand, it needs a solid client base. Business expansion is critical for growth, but pursuing new business and securing new clients is a cause of apprehension for most growing businesses. Logically, it follows that if you fulfill a client’s needs and if you provide high quality service, then client retention and acquisition efforts should be successful.
However, this is not as easy as it sounds. For example, a business may provide high quality work, but if a client’s needs do not align with the services provided, a client may not return. Additionally, even if a business retains a significant number of clients, new clients are still needed to sustain business and increase profitability.
Options to Tackle Expansion Challenges
- Internal hiring: Hiring additional manpower can address increased operational duties that accompany new business. However, keep in mind that hiring is a significant long term investment and often can be time consuming to identify talented resources. In particular, full time accounting expertise is expensive, so businesses need to be ready to fund it.
- Establishing infrastructure: Once you have hired the right people, you need to provide your resources with the right infrastructure to be able to deliver better. This again requires an investment of time and money.
- Prioritizing business development: Business owners need to prioritize the pursuit of new business. If you are also managing other functions within the business, such as finances, accounting or marketing, these additional functions may consume time better devoted to business development and growing the business overall.
- Networking and development of partnerships: Forging partnerships is a critical aspect of business development as they create alternative venues to grow a business. For these to be successful, focus needs to be dedicated to networking opportunities.
Partnerships can provide opportunities to ensure that business expands for CPA firms. Following are several examples of how partnerships can foster this:
- Forming alliances that work: A partnership allows your business to forge a mutually beneficial alliance and generate new business to your firm. Depending on the type of partnership you form, businesses may enhance the quality of offering and improve delivery timelines, as well.
- Tapping into niche expertise by entering into a partnership allows firms to leverage that expertise as their own. Focus no longer need to be on cultivating that expertise in a particular area, for example accounting for the hospitality industry. If you partner possess it, you can leverage it for your clients’ needs.
- Leveraging your partner’s client base: Once you develop a strong relationship with your partner, you can also tap into their client base to build your own business. Both Parties can mutually benefit form cross-referrals. When combined with sharing resources in a non-competitive environment, this kind of arrangement can help expand your CPA firm’s business
What Should You Look For In A Partner?
When evaluating characteristics to engage in a strategic partnership, look for a company which can mutually benefit from the relationship:
- Seek out a partner who can enhance your service offerings to your clients in a non-competing manner.
- A partner who is self-sufficient or possesses expertise in accounting can help your CPA business to expand through referrals with the potential to convert to prospects.
- Seek out partners with expertise in niche areas such as tax filings, audits, etc.
A Word of Caution
Enter into partnerships after carefully evaluating the relationship. Look around, research and carry out meetings with several potential businesses before you consider entering into a signed agreement. Assess their levels of expertise, areas of operation and years of experience, infrastructure capabilities, manpower resource, and support services. Once you have reviewed these core areas, discuss financial arrangements and non-compete clauses. After a thorough evaluation, consider signing an agreement.
The team of professionals at Analytix Solutions has expertise to help strategically guide small business in managing financial functions, including accounting and bookkeeping services. We are currently offering a free analysis of your business processes and accounting system. If you would like to learn more on how Analytix Solutions can help your business forward, please call us today at 781.503.9002 or email us [email protected].