When CPA firm consultant Gary Shamis sold his Top 100 firm to BDO a decade ago, he admitted that merging up was the only option he and the partner group discussed and voted on. In an article he co-wrote for Accounting Today, Shamis encouraged firm leaders to have a deeper discussion about all of their options, including staying independent. Surprisingly, he says, this discussion still doesn’t happen enough.
In a consolidating industry with lots of dry powder in private equity, it can seem like all firms are setting up their business model for partner exits through M&A. However, there is another side to the coin: many firms are choosing to remain independent through a strong leadership model, strategic M&A and service diversification.
Some firms on this track argue that remaining independent is best for emerging internal leaders and for their clients. Firm leaders we work with, in fact, say that marketing CPA firms for independent growth is more fulfilling for them and their team because of:
- Less rigid career exploration and development
- More flexible business model to respond to market shifts
- More personalized client experience and multi-service loyalty
- Upward mobility and ownership for ambitious emerging leaders
- Strategic expansion and service offerings
Sure, the multi-partner model can hit a snag as firms mature toward buy-out time. Leaders need to build a model that can deliver on the promise of deferred compensation. And there seems to be a solution there, too.
Accounting Firm Marketing
So you’ve been around for 20 or 30 years and you want to remain independent? Start thinking like a start-up — with enthusiasm and an open mind.
As firm leadership teams proactively decide to remain independent, they can address revenue through organic growth, referrals and service diversification and/or service depth. For example, a boutique tax firm may focus on one or two high-profit target audiences. Another firm may serve a variety of industries, but add a full suite of small business solutions from CAS to HR to IT (all the acronyms!).
The key is marketing CPA firms with intention. That starts with strategic branding — knowing what kind of firm you have and how you want to serve clients — and then addressing the people and processes and services that the market demands.
Stay vigilant. The markets and your clients are in flux. You can’t assume that a market you developed five or 10 years ago will be there forever. Independent firms have the advantage of steering the ship more easily through shifting tides (glaciers?) without running aground. Why? Because your leaders are incentivized to contribute to the firm’s success.
Or are they? Make sure that the leadership track is agile for experienced professionals and new associates. Today’s leaders want flexibility to live their lives while also contributing to an organization that will maximize their skills and interests. We have seen independent firms offer part-time partner tracks that allow for phases of life that support retention and full-time status down the road. We have also seen firms attract mid-career professionals who want a culture that allows them to build something from the ground up… something they couldn’t do at a mega-firm.
Don’t lose those professionals once they hit the five to 10-year mark. As an independent firm, you want those entrepreneurial professionals on the ship with you to leverage all the tools, connections and life skills at their disposal.
Rethink Marketing and Growth for Independent CPA Firms
Once you have brand clarity and the right talent, it’s also important to align marketing with growth initiatives.
Accounting firm marketing is sophisticated and still efficient with the right team and tools. You can invest in the internal strategic marketing team or a multimodel, outsourced marketing team. There are many combinations available for the marketing solution, too. Maybe you have great implementors, but you need an experienced fractional CMO to align activities with your growth goals. Maybe you have the strategists, but you need the implementors without adding more staff or tying down your strategist’s time.
Doing things the way you’ve always done them or holding on too tightly to what you think your firm is… that’s over. In a fluid and changing business environment, you still have options. You can choose the PE exit, selling or merging with a competitor or remaining independent.
Do your research. Then, as Gary Shamis says, have that leadership retreat. Work toward your decision with intention and select your own trusted advisors to guide you.
Questions? Contact us at Ingenuity.
