In this episode of the Future Firm Accounting Podcast, I discuss how many firm owners fall into something I call the “professional services growth trap”. I chat about what this is and how you can avoid it.

Show Notes

0:51 – Like many firm owners, the goal of starting my own accounting firm was to be in control of my own destiny, which leads to a growth mindset.

2:11 – A growth trap occurs when trying to grow an accounting firm due to the nature of this kind of business.

3:58 – Firm owners try to avoid this growth trap by pursuing more automation. But while this is part of the solution, it’s not the full solution.

4:52 – After coaching a number of technology-forward firms, I realized that the problem was in their business model.

5:18 – The concept of a scalable accounting firm model is something I spoke about in Episode 33. It comes down to these 6 elements.

5:34 – For one, scalability requires some standardization across your client base. A scalable system cannot support every kind of client.

5:44 – Secondly, you’ll need a standardized productized service offer that you provide to your clients.

5:56 – Thirdly, a scalable firm relies on inbound marketing to generate leads, rather than hunting for business.

6:04 – The fourth requirement for a scalable firm is for all processes to be standardized.

6:11 – Fifth, you’ll need a team that’s fully aligned and works in the same direction.

6:20 – Finally, technology and automation certainly contribute to a scalable model.  

6:39 – To avoid the trap that many businesses fall into when they are growing, which is overwork, chaotic operations, and spending too much on income, the solution is to design a system that works like a machine and standardizes as much as it is humanly possible.

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