Wherever you are consuming the news this week, you'll be seeing the same thing.
The words "teetering on the brink of a recession" are popping up with alarming frequency, whether that be in the US, Europe, the UK, China, Australia...
So, how do you respond? Here is a grab-bag of thoughts:
1. You would expect nothing less from us at ReNew - it starts with MINDSET! Our observations over a combined 50+ years of working in and with the accounting profession are that when the economy is bad, most accountants take the view that their clients won't want to hear from them and will certainly not want to pay for additional services. In other words, they put their tails between their legs and slink away. We've found that the firms that flourish in down economies are those that take the view that their clients need them more than ever - and they get on the front foot to offer help. I was fortunate to 'grow up' in a mid-sized firm in the early '90s in the UK, a very tricky time to navigate. We had work coming out of our ears and were growing at 25% a year because we were constantly thinking about what help our target clients needed, and proactively approaching them to offer that help.
2. PARETO becomes more important than ever. If you take the view that your target clients need more help, you physically can't do that if you are entangled with clients in the Danger and Insanity Zones. If these terms are unfamiliar to you, get in touch to see what your firm's Insanity Zone looks like.
3. Stay close to the numbers. Booming economies can cover a multitude of sins. Business clients get away with poor pricing, lack of cost control, undisciplined discounting or ineffective marketing campaigns because there is enough revenue to get by and make a living. Your high-net-worth individual clients similarly fall into the trap of indisciplined spending or poor investment strategies when their income is strong. What if you met with your top 10 clients and took them through an exercise to see what would happen if sales volume or income dropped by 25%? Or showed them their breakeven sales price. Or explained how many customers they could afford to lose if they increased their prices by 15% before they were worse off? All of this is numbers-based advisory work, which you can scale. Adapt for your target clients.
4. Leverage technology. Clients are much more receptive to remote CHECK-INS (rather than face-to-face MEETINGS) than they were prior to the pandemic. So, use that to your advantage. You'll gain some efficiencies too. There's research that suggests that the average length of a Zoom meetings can be over 50% shorter than the equivalent face-to-face. People are more inclined to get to the point quickly on a video call. And that's before you factor in any travel time.
Learn advisory skills and teach your team. Our members use our ReNew Your Advisory online training program to learn basic business advisory skills.
In summary, take control, with a mindset that your clients absolutely need you, clear the decks by weeding out the insanity, and get clarity on your advisory offering. When the rest of the profession is taking a step back, it's very easy to stand out just by taking one step forward.
Taking Action:
If you're interested in more insights like these, consider signing up for our Renewsletter: https://www.renewgroup.com/newsletter. Alternatively, if you'd like to discuss your CPA firm's specific needs, feel free to schedule a call with us: https://www.renewgroup.com/contact.
About the Author:
Colin Dunn, a Chartered Accountant with extensive experience in the accounting industry, is passionate about helping accountants transform their firms and lives. With over 25 years dedicated to creating content for to help CPAs improve their profitability, Colin shares valuable insights into ways CPAs can respond to prevailing economic conditions. Colin believes that CPAs can create a better work-life balance by learning from past experiences and applying these insights to their firms, allowing them to spend more time with their families and pursuing hobbies and leisure interests.
About Renew Group:
Are you tired of being on the diet but not seeing results? Most consultants to the CPA Profession do lots of talking and deal in 'fluff'. But there's no accountability and no focus on RESULTS.
At Renew, we start with your numbers. Our firms complete a Pareto for Profit analysis EVERY YEAR, set new targets to improve their profitability and then 'weigh in' regularly. We give you a roadmap to transform the profitability of your accounting firm by accessing our content, collaborating with other firms on a similar path and being held accountable by our coaching team and your peers.
Get paid what you're worth, create a better life based on a scalable business model and eliminate tax season insanity once and for all!