What’s the secret behind 7-figure accounting firms?
As someone who built (and sold) a 7-figure accounting firm…
I can tell you this:
Many of the reasons they made it there are things you likely already know.
And in this article, you’ll learn how to grow your accounting firm to the $1M mark without an overly complicated process!
Let’s go!
The Roadblocks Standing Between You and $1M
If there’s no secret…
Then what’s stopping most firms from getting there?
Usually, it’s the same handful of things.
And chances are, at least one of them is holding you back right now.
Relying on Client Volume Instead of Margin
Stacking clients sounds like the easiest path to $1M.
More clients, more revenue, right?
That’s not incorrect.
But more clients also means more relationships to manage, more files to review, and more fires to put out.
And guess who ends up in the middle of most of them?
You.
This is the same approach I took when I started Xen Accounting in 2013, as you can see by my horrible, super-low pricing…
And while I was able to sell the firm 5 years later, that wouldn’t have been possible if I didn’t prioritize pricing higher.
Chasing volume at low prices means you need dozens of new clients just to move the needle, when a handful at the right price would get you there faster.
Instead of getting as many clients as possible, your goal should be to get more margin per client.
Expensive and Unsustainable Marketing
Most firm owners know marketing matters.
They just don’t want to be the one doing it, and that’s fair.
But knowing you need it isn’t the same as needing to go all in on it.
Content, ads, social media, blog posts, videos…
It all works.
But only if someone is pouring serious time (or serious money) into it every single week.
If you only need a handful of new clients a month, you don’t need to do all of the stuff I just mentioned.
That’s way too expensive to sustain.
Keep it simple: start with one or two marketing channels, and then keep working at it.
No Niche or Focus
Let’s be clear…
You don’t have to niche down.
There are plenty of firms out there doing great as generalists.
But niching down does make it easier to carve out your own identity.
When you’re not “just another accounting firm,” it’s easier to frame the value of what you do around a specific client’s world.
You stop being a commodity, stand out, and are able to charge more.
Why?
Because your services feel tailor-made instead of one-size-fits-all.
Selling Scope Instead of Value
You know your services are valuable.
The problem isn’t what you do…
It’s how you talk about it.
Most discovery calls sound like this:
“Here’s what we’ll do. Here’s how long it’ll take. Here’s the price.”
In other words, a list of tasks.
But your client isn’t lying awake at night worried about which tasks get done.
They’re worried about the problem those tasks are supposed to solve, like overpaying in taxes or worrying if their business has room to grow.
I’m not saying that you need to change the way you work.
I’m saying that when you sell the outcome instead of the task list, you can charge more while doing the same work.
A Bottom-Heavy Team With No Seniors
A lot of firms are stacked with juniors, like this:
Why?
Because the logic seems to check out:
More clients means more work, and more juniors means more hands to handle that work.
That logic misses something, though…
More juniors also means more reviews and more escalations.
And more complex situations that a junior simply can’t handle on their own.
Again, that all lands on you!
Without a senior on the team to catch that complexity, every single thing still runs through you.
Which means that instead of getting back more time to grow your business…
You’ve just scaled the bottleneck.
5 Steps to Take Your Firm to $1M
I know that getting an accounting firm to $1M sounds daunting…
But it can be done, and you can certainly do it.
The most important thing is consistency.
If you have that, then the 5 steps below will work for you.
Step 1: Focus on a Niche
Again, niching down is not mandatory.
But this step makes everything else after it easier, helping you:
- Sharpen your value proposition
- Make your packages better
- Perform effective marketing
You don’t need to go all-in on one industry.
Even a moderate focus works.
But the tighter the niche, the easier everything downstream becomes.
Here are some questions to help you find the right niche for your firm:
- Which clients do you really enjoy working with? These are usually the ones where the work doesn’t feel like a slog. You can picture yourself doing more of it (at a higher price) for years.
- What type of work lights you up? Is it tax planning or cash flow? Perhaps advisory conversations that move the needle for a client?
- Who do you already have the most experience with? Chances are, you’ve already got a cluster of clients in a similar space.
And once you’ve got a few answers…
Look for the overlap.
The right niche is where your enjoyment, your expertise, and a real market need all show up at the same time.
(On top of being profitable. 🙂)
For instance, Calmwaters found their niche in accountants!
A niche is your identity.
It’s the lens a lot of future decisions will run through, from how you price, to how you package, to who you attract.
Step 2: Build a Value Proposition That Shows Up in Your Packages
This step starts with a simple question:
What are you promising your clients?
And remember, “we do your books” is not a value proposition but a task.
A value proposition is the specific transformation a client gets by working with you.
Here are a few examples of what that can look like for different client types:
- “We help you become more profitable and compliant.”
- “We help you fix cash flow so you’re never guessing if payroll clears.”
- “We help you keep more of what you make on every deal.”
Every one of these mentions outcomes.
For example, here’s a nice value proposition on the website of My Finance Team, an accounting firm.
Once you have a nice value proposition, you need to deliver it inside the work.
If you tell an e-commerce client you’ll help them become more profitable, your packages better include something that does that.
That could be a SKU profitability report, a monthly profit review call, or anything a generic firm down the street doesn’t offer.
That differentiation is what lets you charge more.
And when you can charge more, you don’t need as many clients to hit $1M.
At $1,500 a month, you’d need around 55 clients to get there.
At $300 a month, you’d need over 270, about 5 times the workload!
Step 3: Use Simple, Targeted Marketing
There are dozens of marketing channels available for you right now.
Social media, a YouTube or TikTok channel, a blog, a newsletter, etc…
Expanding from using a couple of channels is one thing, but if you’re starting from scratch, it’s easy to XYZ.
You don’t need dozens of new clients every month.
Which means you don’t need to build a marketing engine sized for that.
Marketing is an investment.
And like any investment, it only makes sense if the return justifies what you’re putting in.
Pouring time and money into five channels to land three clients a month is an expense.
Instead, focus on three low-lift channels:
- One networking event a week. In-person networking never really goes away. People still want to do business with people, and a single weekly event, done consistently, adds up fast. My first clients came from networking when I started my previous firm. Some of my longtime clients came from in-person networking too.
- Active participation in niche-specific online communities. Find where your ideal clients already hang out, whether that’s a Facebook group, a LinkedIn community, or a niche forum, and show up to help, not to pitch. Answer questions. Be useful. The referrals will come later, on their own.
- One solid referral partner. A bank, a law firm, a software vendor, anyone who already has the type of clients you want. One good relationship here can outperform months of content. In my previous accounting firm, I’d have referral relationships with law firms, and we’d exchange business.
These three simple channels, done consistently, will get you a healthy stream of leads.
You can always expand to other marketing channels, one step at a time, later.
I personally started out blogging in 2013…
…before expanding to writing newsletters about 5 years later.
If you feel that you’re ready for something like that, I’ve got a guide to marketing for accounting firms for you.
Step 4: Convert Leads to Clients
For a lot of firms, the sales process looks like this:
- Show up
- Hand over an impressive list of services
- List out the scope
- Quote a price
(If they even have a sales process at all.)
Here’s the problem…
As great as your services really are, that approach makes you sound like every other accountant out there.
And when you sound like every other accountant, the prospect defaults to the cheapest.
So, what do you have to do?
You need a sales process built around solving the client’s problem, not showing off your task list.
And the most important part of that process is the discovery call.
Instead of jumping straight into what you do, ask them questions about what they’re dealing with.
Here are a few to start with:
- “How would you describe your current accounting situation?” Let them talk. Don’t interrupt with solutions yet. You’re gathering, not pitching.
- “How does that make you feel?” This is where the real answer usually shows up. Maybe they’re stressed or scared they’re missing something. That feeling is what they’re paying to get rid of.
- “What would you be able to do if this stopped being a problem?” This gets them picturing the outcome, not the deliverable. More time, more confidence, room to grow the business, etc.
Once you understand the problem and what solving it is worth to them, you can present a solution instead of a service.
Like instead of selling a “business tax return,” you can sell a comprehensive, more premium solution like below:
Clients are willing to pay significantly more for solutions.
If you want to learn more, here’s how to run an effective accounting discovery call.
Step 5: Build a Team That Buffers You From the Business
Like we talked about earlier, while juniors are less expensive than seniors, they won’t take you off client work and review duties.
That’s a big chunk of time you could otherwise spend growing the firm.
The solution?
Hire at least one strong senior on the team.
This person should be able to:
- Review work from juniors without you double-checking it
- Handle concerns or escalations from clients
- Buffer you from the day-to-day, in-the-weeds work
That said, a strong senior is not cheap.
You might find it difficult to justify that hire (let alone afford it) on thin margins.
Which brings us back to the previous steps about your value proposition and charging based on value.
The margins that you get from implementing those steps are what will pay for senior team members, who will then enable you to focus on scaling your accounting firm.
Heck, when I started Xen Accounting, my first hire was a senior, and I paid myself little for the first one or two years.
Was it difficult?
Absolutely.
But like I shared on my LinkedIn, I don’t regret it. 🙂
Are You Ready to Build a 7-Figure Accounting Firm?
That’s a wrap!
Getting to 7 figures takes time and consistency, but it doesn’t have to be a complicated process.
If you’re ready to build a profitable accounting firm that can run on autopilot…
Go check out Future Firm Accelerate.
Good luck!
