Planning produces better results
Your firm has come up with a growth goal. It may have stemmed from discussions around client attrition, charge hours and changes in your clients’ businesses. Your partners agree that a 7 percent goal sounds reasonable. So you drop that number into your budget without really looking at how that goal will be achieved. Now what?In too many firms you have partners looking at one another; counting on someone other than themselves to carry the ball for the team. When establishing the goal, no one really talked about the organic growth needed or how it would be obtained. It’s assumed you can count on a number of referrals from your centers of influence. While that may be true, it probably won’t equate to 7 percent. And there will be no rhyme or reason to the dollars that do come in.
Start with a Plan
You need to know where your growth will come from. Will it be driven by SALT, audit or a consulting offering? Will it come from the construction, retail or restaurant industry? Will it stream from current clients or new clients? Growth needs to start with a plan. Once you know the answers to these questions, you can develop marketing strategies and tactics that will drive the revenue you desire.
When writing your plan, start with your goal. This one is easy – to increase revenue by 7 percent this year. The actions spelled out in the plan should focus on how you will do that. It could include things like launching a state of the construction industry survey, obtaining $X in leads through your website or launching a monthly webinar series.
This plan should align with your business goals. It will help keep your efforts focused while also helping you better plan marketing spending and track ROI. Before you put pen to paper though, you need to first understand your strengths and where market opportunity exists.
Look at the Numbers
Where does your current revenue come from? Start by segmenting your revenue to understand the depth and breadth of your services. Here’s how:
- Create a table in Excel.
- Every row is a service you sell. Be as specific as possible. Instead of accounting, think QuickBooks, payroll processing and financial statement preparation.
- Every column is an industry that your clients operate in (e.g., manufacturing, construction, retail, etc.).
- Now, drop every dollar of your prior year’s revenue into the corresponding cell.
- Tally up the rows and columns and determine what percentage of your total revenue the cell represents.
The rows and columns that make up the highest percentage of your revenue are the areas in which you have the most expertise. As long as there is market share to be gained and you have a differentiator that gives you a competitive advantage, these are probably the areas where you’ll see the most growth going forward.
You can set a growth goal for any column, row or cell. Equally important is knowing who in your firm is going to drive that respective revenue. If you decide that you want to increase your employee benefit plan audit revenue, who is going to get that work? That person needs to help flush out the marketing strategies that will get you more opportunities to bid on benefit plan audits.
However, there is additional data you need to consider, and that’s how much market potential you have. The easiest way to do this is to calculate the number of specific clients you have in a category like museums and compare it to how many exist in the market place. Just because you have six really great museum clients, doesn’t automatically mean you should focus your marketing resources there. What if there are only eight museums in your geographic marketplace? That doesn’t leave a lot of potential revenue to be gained. It’s a completely different story though if there are 80 in your target market.
Market potential will help you decide where you should be spending your time in the marketplace in order to reap the greatest return.
By understanding where you excel in addition to where you can make money, you are beginning to put together a growth strategy. This is a much needed first step. From here, you can then better define your buyer by revenue, geography, organizational structure, technological sophistication or any number of characteristics. And then develop a channel of distribution strategy that basically spells out where you find these ideal buyers.
Growth is not something that can be accomplished haphazardly. You put thought into what you think is a realistic goal. Give equal consideration to what makes up that goal. You will have better odds of hitting your desired goal if you take time to plan out your growth.