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.
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, automation and accounting technology 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.