Good profitability, strong cash flow, growing return and being client-focused go hand in hand. At practice level, most accountants believe this, but they have a hard time identifying specific actions and communicating the benefits to clients in a manner they can understand and value. Here are first five specific things you can do:
- Make sure the practices objectives are aligned with those of the client – This is the most important step you can take to create a successful practice. What do your clients want not need? While the question is simple, the answer often is not. Do your clients want customised solutions or conservative answers? Do they need someone to hold their hands or challenge their decisions and partner in their success?
- Get to know your clients – Clients can be segmented into one of four groups. There are clients who want you and you want them (A Class). There are clients that you want however for some reason they do not want you (B Class). There are the clients who you do not want yet they want you (C Class), and finally there are the clients that you do not want and they do not want you (D Class). Can you convert the B Class to an A Class client? Is your future servicing the C and D Class clients?
- Focus on making your clients more successful – Think about the things that you can do to improve your clients’ return. The more you do this, the more value-added services you will be providing and the more loyal your clients will become. Use services that promote the need for improvement. Focus on developing the client’s strengths and addressing the client’s weaknesses.
- Focus on client profitability – Too many firms focus on client revenue. It’s not what you generate, it’s what you take home. Change your focus from top-line revenue to key bottom-line profit for each client. Determine your acceptable gross profit margin before you accept the next new client. By doing this you will focus on the right clients.
- Don’t focus only on billing more time – Client-centered, value-added practices focus on solving client problems and issues, not on building up chargeable time. The more successful you can make your clients, the more successful the practice will be. Learn to bill on the value of your work, not the time that you spend. Know your practices value proposition and sell it to the client.
Help to define your firms value added proposition at the Smithink Business Advisory Conference at Hamilton Island on February 4 and 5, 2016. For further details click on: http://www.smithink.com/event/business-advisory-conference-2016
© Mark Holton, Smithink 2020 Pty Limited, www.smithink2020.com
Director at Smithink
David Smith is a founding director of Smithink. He is the external practice advisor to many firms participating in firm management activities to provide an objective viewpoint and an understanding of strategies that have achieved success in other firms.
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