10000s of regional firms are going nowhere, not moving forward, or slowly going backward. Depending on which perspective one wants to view it from. Regardless of your viewpoint, a more significant fact is they know it and yet continue to operate as normal!
In the last 3 years, business coaches, consultants, and other advisory suppliers have turned their focus towards building relationships with regional accounting firms. They are doing this as they recognise accountants have a superior relationship with the same people they want to serve. That is, accountants are the best channel for these businesses to increase their revenue from the small and medium business marketplace.
What they are really saying!
The accounting industry does not see the opportunity that’s in front of them and if accountants aren’t going to take that up, then these suppliers are going to take target that opportunity and provide services through the accountant’s relationship.
What they really mean?
As an industry accountants have not developed the necessary skills to match what SMB’s have been begging for. Most regional accountants have been so busy keeping up that they have ignored what the market has been telling them. Accountants are unskilled in fundamental of the business advisory.
What’s really happening?
Regional accountants are seeking growth in fees and looking to expand service offerings. However, most are doing little about it as they are too busy doing what they have always done. This busyness is causing procrastination and they’re happy to do so because they are comfortable;
- Whilst profitability may have slipped over the years, it hasn’t affected lifestyles enough to make our industry take a hard look at themselves.
- Clients are still paying and in recent times, increased their activity around day-to-day general advice on the compliance and administration of their businesses, therefore revenue hasn’t really changed, despite the media prediction compliance is dying. It has simply been replaced with more labour intensive revenue.
The impact of this comfortableness? Firms profitability has reduced as the services they now offer are more reliant on labour than processing. Firms are now seeking ways to offer additional services that utilise technology or less labour intensive, however, they lack the know-how, thus the uncertainty of what to do next. Thus, have been for some time now sitting around in partners meeting, arguing about which way to move forward and how. This has been going on for 3 years or more and 1000’s just aren’t progressing.
Here is an example of procrastination that’s stifling the success of a good regional firm:
A regional firm with 7 partners made contact regarding moving into advisory services and what’s involved in doing that. After asking a few questions the following became evident:
- They have known they needed to do something for about 3 years.
- They have made some attempt move into the advisory space and introduce new services to clients, but busyness has gotten in the way and it’s not progressed near enough.
- The services they have introduced have simply made their best people busier and after initial growth, selling has stalled because it’s all to much work and the easy clients have already purchased.
- Partner alignment has been difficult as each has their own opinion, own way they want to work and some are simply opposed to making the necessary changes.
- The How To Do IT, is not transparent by any of them.
After an initial discussion, they have decided they could make a decision on the right model moving forward and have had 2 partners meeting to discuss this, without result.
What’s going on in this firm?
They are incapable of recognising they have a problem! They have spent three years attempting to decide on what to do, it’s obvious they do not want to make a decision that will upset anyone of the partners and until they agree to have this facilitated their problem will continue. OR they will buy a piece of software/educational program and rejoice how they solved their business model problem, only to stumble into frustration when growth stalls again because of capacity busyness, loss of good people, or lack of client uptake.
TwentySix Group Business Accelerator Session
A one-on-one Online discussion that identifies the drivers that will determine your one critical decision, which model is right for your Firm of Tomorrow. Facilitating this process, it is important that you and your partners understand how your firm sits in the market now and how it should sit in the future. Even more critical is to know, how clients will determine the value to them and their business. You will walk away with a plan on how to bridge that gap that exists between where you are now and your desired firm of tomorrow.
Coverage of the Program:
Focus – Identify your target client
Clarity – Understand your Unfair Advantage
Confidence – Know the gap between where you are now and the firm of tomorrow