My old man used to say, don’t just stand there do something!
It took me 30 something years to fully appreciate what he meant but when I did it was a great lesson. When a new business (read accounting or advisory practice or any business for that matter) is started hunger for growth leads to the founder(s) being very active on the marketing front. They spend a lot of time working ON their business as Mr. Gerber says.
When they get busy doing the technical things the business does i.e. the IN stuff, they take their eye off the ON things and the business stagnates. Worse still it tends to drift towards mediocrity. Growth comes from trying new things, getting out there, looking for and taking advantage of opportunities just like you did when you started your business. If you are not the person who started the businesses you’ll have a special challenge to address and that is, you don’t really know what “growth hunger” is all about.
I have a simple (perhaps over simplistic) theory: the reason many, if not most, established practices hit a growth brick wall is that the people who inherit a leadership role have not been mentored and seasoned as “business growers”. Their training, experience, performance expectation and financial reward has been as “business doers”. So here’s a very simple thought: if you were able to grow your business at 40% a year from start-up and keep that up for 3-5 years, which is not at all unusual, then you should be able to do that from any starting base at any time BUT NOT IF YOUR TIME IS TOTALLY CONSUMED WITH DOING THE THINGS THE BUSINESS DOES.
And there’s a flip side to that theory. The reason most most practices that were started by the present owner(s) hit a brick wall after a few years is that they start to make enough money to get by and are not willing to “risk” what they’ve built up in the pursuit of more growth. This is rationalized by the statement “I’m too busy servicing my clients to get out and do the things I should be doing to grow the business.” I would argue they face a much greater risk by standing still and the risk will become even greater in the future if only because:
(1) quality team members will not hang around in slow growth, no opportunity, environments and
(2) practice values in the future will increasingly be based on growth prospects (reflected by growth experience), client quality and loyalty, team member quality and loyalty, service design and margin. These are not typically things that score very highly in slow (or no) growth firms.
Strategic planning is very important but it can also be very limiting. The key is to take the “limits” away and the most constraining limit is a mediocre growth target set in your plan. If you want to double the size of your business you need to start with that as your goal then ask yourself what will it take to do that? Now, you might not do that overnight but at just 15% a year, you will do it in 5 years. I’d add to that, if your practice revenue has not doubled in the past 5 years then it won’t double in the next 5 unless you start to do some different things. And, I’d also add — 15% is nowhere near what I know you’re capable of doing! To quote Herb Kelleher, when he was CEO of Southwest Airlines: “we have a strategic plan, it’s called doing things” which explains the amazing sustained success of that business despite it being in a horrible industry.
Here’s one more thought. Peter Drucker told us in 1973, there’s only one purpose of a business: to create a customer. He goes onto say “the business has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are ‘costs’.”
So here’s something for you to ponder: what marketing and innovating are you doing? Those firms that are doing this, knowingly or otherwise, are stealing the march on the rest. Let me conclude with Michelangelo’s famous words.
The greater danger for most of us is not that our aim is too high and we miss it, but that it is too low and we hit it.
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