Having too much business can be just as damaging as not having enough, especially if you're not ready for such growth. Sounds weird to say, doesn't it? "I've got too much work," "We have too many clients"...most small accountancy firm owners would say that's a nice problem to have. But, while this may be true in theory, sudden business growth can also lead to a lot of stress, a lot of headaches, capacity and resource issues, and even dissatisfied clients! To help you avoid this, here are 9 strategies for how to cope with sudden growth.
Strategy 1: prepare for such a situation in advance
Ever heard of the saying, "Mend the roof before it rains"? It refers to preventative maintenance. I.e. fixing a leak in good weather means that you can do it properly and then when it rains, there won't be an emergency. The same goes for planning for sudden business growth! If you prepare for it in advance, you won't have to put out fires and work crazy hours when you start to experience this growth.
If you're currently thinking, "How likely is this really to happen to my firm?", try to think instead "What if this did happen? Would my business suffer?" In our experience and our members' experience, this happens more likely than you release. For most firms, it only takes a run of good fortune with new work wins for an accountancy firm owner to start dreading new business calls.
So, how can you prepare for sudden business growth in advance?
1. Review your pricing and check your cost base
Many accountancy firms run their operation too leanly, meaning if there is a slight upswing in demand, operations will crack at the seams. This is a strong opinion of mine from working with many small accountancy owners over the years, so to check if this may be the case for you, review your finances.
Is your firm profitable enough without running at full capacity most of the time? If not, you need to increase your fees! There needs to be some spare capacity available to cope with any sudden upturns.
2. Utilise outsourcing and offshoring
Many of our members utilise outsourcing and/or offshoring to help them with clients’ compliance requirements. This is a great way to have capacity available to your firm if you need it quickly! (E.g. at the time of writing this article, there is a severe talent shortage and it's taking many firms 3-6 months to hire new team members!).
3. Review and monitor your lead generation
New business wins can come as a surprise which can then lead to unplanned and sudden business growth. To minimise the impact of this unexpected growth, start regularly reviewing and monitoring your firm's lead generation.
What works and what doesn't? What do you need to do to generate more business? And what needs to be put in place to cope with this growth? The more awareness you have about the amount of work likely to come in, the better you can plan and manage this growth when it happens.
4. Plan your capacity and resourcing
Another strategy for how to cope with sudden growth is to carefully plan your capacity and resourcing. i.e. looking ahead for the next 12 months and in detail at the next 3 months. This shows you how much capacity your firm really has going forward AND when you will be able to take on more work when you've increased your firm's capacity to a certain level.
Essential resource: download our free template How to create a 3-year growth plan to help with this.
Strategy 2: guard your own headspace and time to work ON the business
When your small accounting firm grows suddenly, there is a requirement for ‘all hands to the pumps’. It’s very common in this situation for the owner of a small accounting firm to roll up their sleeves and get involved in delivering more of the client work. I'm not saying that this is a bad thing, at least for the short term, but if it becomes a long term change, that's when the real damage begins.
If you're constantly doing client work, the long-term strategic stuff will stop. As a result, the following can happen:
- Short-term decisions are taken without considering the longer-term impact.
- The firm starts firefighting.
- Practice efficiency drops.
- The clients who shout loudest get their work done first (rather than those clients whose work should be prioritised).
- The firm gets caught out by staff on study leave or taking holiday.
If you really want to know how to manage rapid business growth, you need to take a step back from client work. Don't get pulled into putting out the fires yourself. For the business to continue growing and growing sustainably, you will need to preserve your time to think, plan and review.
You've won new business, so can you get rid of some unprofitable clients or clients who no longer fit your firm's goals? What processes can you streamline to increase your firm’s capacity?
Essential resource: download our free recording to learn How to create time & headspace to grow your practice.
Strategy 3: pay attention to your bottom line (especially as your top line increases)
When your small accountancy firm is growing, it can be tempting to increase your headcount; a headcount which will inevitably need more of your time and resources. Obviously, there are times where this is necessary but make sure to keep an eye on your bottom line before splashing the cash.
Yes, more people and resources will mean shorter working hours for you (which is the ultimate goal!), BUT your firm can easily slip into what our members call "just paying the wages" as your firm grows. This isn't what you want! After all, there is no point in growing your firm by 100% in a year if your profits hardly budge.
Strategy 4: be prepared to turn work away
This is always a tough one to master but trust me, it'll be the best mindset change you make. If you really want to know how to cope with sudden growth, it's as simple as not accepting every new piece of work that is being offered to you. Instead, be more focused on who you actually want to work with and take into account the capacity that you currently have.
When managing sudden business growth, you need to prepare yourself to turn work away and to say no to client requests more often. If you don't do this then you (and your firm) will get yourself into a pickle. Out of all the strategies that we have taught our members, this one makes the most impact on both business growth and our members' sanity. Many of our members have successfully stopped accepting new work for a period of a few months or over the November to January busy season. And not one person regrets it.
Strategy 5: prioritise the physical and mental health of your employees (and yourself!)
Working long hours to cope with a sudden upsurge in demand will take its toll on both you and your staff members. Often, this is actually the reason so many staff members and accounting firm owners are ill in January and February! As the firm owner, it is your responsibility to make sure that your team members are happy and healthy.
Are your employees taking enough holiday? In our experience, many accountants have not taken their holiday entitlement since the pandemic started, although this may change as it becomes easier to travel abroad for a holiday.
Is anyone burnout or withdrawing from the team? Encourage employees to take time to recharge and to prioritise their wellbeing. This includes sleeping well, eating healthy, exercising, and switching off from work.
Strategy 6: prioritise ruthlessly for yourself and your staff members
Here in the Uk, November used to be the start of the busy season AND the time for several major conferences (such as Xerocon). This meant that many accountants and their teams spend a lot of time attending these conferences only to bitterly complain later about how little time they have for client work. Over the years, I have sat down with many accountancy owners and I have tackled this head on.
When you experience sudden business growth, you need to start being ruthless with what you and your staff members spend their time on. This means, sitting down with them and removing any 'nice to do' activities from the diaries and replacing them with urgent or higher value tasks instead. The same goes for team meetings, they are actually essential as long as they are run efficiently! It is these team meetings which allow you and your team to take the right decisions and keep the focus on what needs to be done. (Learn: the basics to purposely running effective team meetings).
Strategy 7: don't let your service levels drop for existing clients
As a business owner, there is nothing I hate more than our suppliers dropping their service levels to us due to rapid expansion. However, despite the best intentions, sometimes your firm will end up with more work than it can handle.
In this situation, it’s essential to communicate to your clients about any changes to the service level. For example, will your firm reduce the time it is taking calls? Will you start outsourcing their compliance work? With these changes, it is also necessary to demonstrate in your communication that this should be a short-term blip as there is a plan to go back to your firm’s normal high service levels.
Strategy 8: discuss potentially changing your office lease with your landlord
Learning how to manage rapid business growth will also take some planning on your part. For example, with the space that you have. When you took on the lease for your office, did you think you'd ever fill the office space? Many of our member's thought the same but down the road, found that they needed extra team members and had no room for their desks! It happens.
If this happens to you or you're planning for it and you still have years left on your lease, see if your landlord can help you. Are there more rooms in the building which you can utilise? If not, is there any flexibility to be let out early from your lease? If it's a no to the latter and you're stuck with your current office premises for the foreseeable future, could you implement a flexible working arrangement with you staff? For example, having more of the team working from home during the week?
Strategy 9: reduce your marketing activities but DON'T stop them completely
This may seem like strange advice for how to cope with sudden growth, but bear with us. Yes, you may be screaming out for more time and resources and you may be struggling with over-trading to stop your marketing. But try not to be tempted! Even though the last thing you want right now is to win even more work, this isn't going to be what you want forever.
This thinking can lead to feast and famine. I.e. when you have recruited and resourced up, the new work starts to dry up. And that will lead to business stagnation. To nurture sustainable growth, reduce your marketing in busy times and become more focused with it, don't stop it all together.
Be ready for growth and thrive!
Planning beforehand, prioritising, and turning away work may seem like obvious pieces of advice. But try to really take these on board! All 9 of these strategies, if you're really focused with what you want, will help you cope. Not only in busy periods but also when the unexpected happens (which it will).