YOUR DEFINITION OF SUCCESS
When entering the world of advisory services, we have to be careful regarding our definition of success and define a policy that will lead us in the right direction - rather than rushing into something that may not ultimately serve our long-term plans.
For example, it's easy to roll out a third-party or cloud-based advisory service, pat yourself on the back and, less than 12 months later discover that you aren't able to offer this to more than just a few clients.
This is often because your own structure and scalability does not afford the time needed to properly implement the new service. And, when combined with a poor planning, means that the benefit of hindsight is somewhat frustrating on reflection.
THE SCALE CONUNDRUM
90% of accounting firms commence the journey to rolling out some form of advisory offering before they have considered their own capacity or the scaling capabilities of the value added service itself.
Every third party bolt-on or value-added offering has one or two bright and shiny key bullet points that sound extremely appealing and valuable to the end customer in the eyes of the accountant.
However, the time poor nature of smaller professional service firms means that the person evaluating the offering is often not skilled enough to know how the new service may impact their firm. Whether it be in terms of the drain on their own core accounting team, or the scalability of the offering itself.
So 90% of the time, a fairly poor quality decision is made in the identification and evaluation of what is going to work for the firm, and they only discover the consequences after implementation.
YOUR CAPACITY IS YOUR PROBLEM
Most of the time, the accounting firm’s mindset or that of its leaders is the problem. We hear that capacity is the issue which isn’t following the law of cause and effect that identifies a lack of capacity as the effect, not the cause.
Most firms are poorly structured due to the mindset of the leader(s) which forbids compliance staff to operate as a compliance services hub, without the leader’s heavy hand of involvement at every step in the process.
This mindset stifles growth of the team as well as grossly limiting the firm’s ability to build scalable advisory services.
SCALABILITY IS A RELATIVE TERM
The comfort zone and egos of the principals determines what level the glass ceiling will be set at, in terms of a conscious or unconscious decision, etc.
For example, a NSW-based firm recently complained of a lack of scalability because they had failed to maintain their once robust growth trajectory and had been stuck at $5M annualised revenues, for multiple years in a row.
The issue of cause was unable to be discussed with any transparency because they “knew it all.”
To a smaller firm stuck at, say $750k annually, the $5M firm’s problems may seem sublime - yet the $5M firm was stuck due to exactly the same issues we're discussing here.