Ask any UK accountancy practice owner why they made a decision to set up their business, and you will hear a common theme. It is obvious – is it not? Owning a practice provides accountants with a level of independence and autonomy that is impossible for them as employees.
They also feel they have more control of their work, that it will be more intellectually stimulating, and that owning a successful practice can provide a sense of professional fulfilment – not to forget the financial perks!
However, growing a practice is not easy. It is essential to note that building a successful business entails working long hours, solving complex problems, chasing challenging clients, managing cash flow, retaining and nurturing talent, and dealing with the pressure and uncertainty that come with ever-changing tax laws and legislation.
Achieving £1 million in revenue is a significant milestone for any accountancy practice. It requires hard work, dedication, and a willingness to adapt to changing market conditions.
So if you possess an entrepreneurial spirit and a desire to build a £1 million accountancy practice, we want to help you. This article discusses the biggest hurdles accountants face while growing their business and what actionable insights they can take to hit the mark:
Common roadblocks to growth in accountancy
If making big bucks was easy for business owners, everyone would have their venture. But that is not the case. There are problems that even the brightest minds building their accountancy practice face, some of which include:
- Leadership: The inability to execute the vision and implement the core values consistently across the team. Remember – the bottleneck is always at the top of the bottle!
- Technology and infrastructure: The lack of systems, processes, application stack and organisational structures to handle the complexities in communication and decisions that come with growth and scale
- Sales and marketing: The inability to ramp up an effective marketing function to both attract new relationships (clients, talent, vendors) to the business and address the increased competitive pressures (and eroded margins) as you scale
- Cashflow: The inability to maintain adequate cash flow to sustain inorganic growth and further expansion
- Price and scope creep: The inconsistent pricing structure and its review and lack of clarity concerning the scope of work
- People: The inability to attract, hire, train, retain and manage talent
What can you do to join the £1 million club?
Making your accountancy practice worth £1 million requires a well-thought-out plan, a focus on critical areas and a consistent effort. Think of it as a transformation project that compels you to:
1. Revisit your why's and values
You will not achieve the £1 million turnover mark unless you make it your end goal. Set aside dedicated time to reflect on your practice’s current state, its strengths and weaknesses, and the growth opportunities.
Understand the purpose and driving factors behind it to define its mission and inform the growth strategy. Find your “why.” Why are you running your practice? How are you making a change in your clients’ lives?
Create a framework with clear goals, objectives, and milestones to guide the practice forward. This strategy should align with your mission and your business strengths and opportunities.
2. Attract the right kind of clients and offer superior service
Consider developing expertise in a specific area of accounting, such as small business accounting or tax planning. This will help differentiate your accountancy practice from competitors and attract clients looking for specialised services.
In addition, please keep in mind it is vital to target the offerings to those clients that align with your business vision. When looking for a target market, ensure it is large enough, and there is demand for it – do your homework first.
3. Engage with the team and communicate your vision and goals
Attracting and hiring “A players” at all levels is as critical as landing the right clients. A strong team of qualified accounting professionals is instrumental in building a £1 million accountancy practice. Bringing fresh talent with the necessary expertise can help your business have the resources it needs to meet its growth goals.
Consider investing in employee training and development to help your employees sharpen their skills and attain new knowledge to deliver a superior service. Moreover, allocate the right jobs to the right people. Identify key roles and responsibilities and assign them to appropriate individuals or teams to ensure the tasks are completed effectively and efficiently.
4. Leverage technology for scalability
Identify and address any bottlenecks or inefficiencies preventing the business from growing. Invest in tools and software that help improve efficiency, allowing the business and your staff to function like a well-oiled engine, take on more clients, and expand.
Automation and digitalisation are becoming increasingly important in the accounting industry. By exploring using cloud-based accounting software such as Xero, QuickBooks and Sage, you can manage tax preparation, filing, and compliance tasks for all your clients in real-time and transparently.
Similarly, establishing and documenting workflows can help your staff to complete and deliver the tasks, in the same way every time, resulting in quality. Leverage practice management tools like Accountancy Manager, Xero XPM, Senta, Pixie, Karbon and IRIS to bring your practice operations under control.
5. Price your services appropriately
Charging properly for your services can undoubtedly play a role in helping you become a £1 million accountancy practice. Here are three ways to go about it:
- Value-based pricing – This approach involves pricing services based on the value you provide to your client rather than on an hourly rate or the service cost. This can attract higher-paying clients willing to pay more for high-quality services.
- Package pricing – Offering bundled services can provide more value to clients and make it easier for them to understand and compare pricing. With this method, you can give them more service combinations, closing more sales.
- Differentiation-based pricing – This involves offering different pricing for different types of services and clients – for example, discounted rates for smaller clients and premium services for larger clients at a higher rate.
However, please keep in mind that there is not a one-size-fits-all solution when it comes to pricing. It is essential to strike a balance between charging enough to cover costs and remaining competitive in the market. Therefore, regularly review your pricing strategy and make adjustments to stay as attractive as possible for your clients.
Outsourcing certain aspects of your clients’ functions can help you improve efficiency, reduce costs, and free up resources that can be used to grow your accountancy practice.
For instance, you can take low-end or tedious tasks such as bookkeeping and payroll off your staff’s plate, allowing them to focus on providing value-added services like tax planning and budgeting and having direct client interactions.
An outsourcing accounting company like Stellaripe can handle end-to-end accounting functions such as bookkeeping, year-end accounting, company secretarial, payroll, tax preparation and filing, and practice management like an extension of your in-house staff.
This can free up your time and allow you to take on more clients and expand your services, giving you a competitive advantage.
7. Expand your client base with robust marketing
A solid online presence is crucial for business growth in today’s digital age. To attract more clients or generate more revenue from the existing ones, you must market your accountancy practice confidently and transparently.
Take help from a specialist agency that offers digital marketing services for UK accountants, such as content creation, SEO, social media, and PPC management, to drive higher website traffic. Your practice should not be left behind as the world continues to shift online. Building relationships with other industry professionals can also help generate new business.
8. Explore merger and acquisition or franchising
If you are looking for a proven route to develop your own profitable accountancy business and an asset for your future, exploring inorganic avenues such as M&A or the franchise model will provide you with the systems and support you need to grow your business quickly and successfully.
Over to you
Ultimately, becoming a £1 million accountancy practice will require a combination of hard work, strategic planning, and a commitment to continuously improving and adapting to the market conditions. By taking smart and innovative steps, UK accountants like yourself can be in a better position to accomplish goals.