Originally published in Accounting Today
In recent weeks, I’ve observed a sometimes subtle, but significant, shift among forward-looking CPA firms, away from filling the pipeline with leads and toward managing the leads coming in the door.
In a time of plenty, as today, these firms are wisely focusing internally to ensure that the practice growth side of their business is as strong and sophisticated as the delivery side.
Savvy leaders know that the current copiousness in the market, especially for midsized CPA firms, will not last forever. And when the time comes, they want systems in place that will keep them successful. What are those systems and how can you benefit?
What to chase
When the goal is to create demand, the emphasis within the rainmaking cycle is on niche development and marketing activities. But when the pump is primed, it’s time to shift to sophisticated opportunity management and delivery.
A critical decision is what business to chase, and what not to pursue, as decisions made today will shape the client base that you’ll possess once the marketplace shuffling slows down. A well-managed, prioritized pipeline is a cornerstone tool for deciding which opportunities to pursue.
The pipeline is an inventory of active opportunities. It should be succinct and easy to use, and can be organized in various ways – for example, by dollar volume, industry, service line or odds of winning the business, among others. The objective is to achieve a tightly structured pipeline that reveals what opportunities you are pursuing, their strategic significance, potential remuneration and likely time to close.
Why bother worrying about practice growth strategies when the phone is ringing off the hook, you wonder? The reason is that it will not always be, and a disciplined approach to managing opportunities is a strategy for future growth.
This type of approach also serves to eliminate waste. When everyone is on the same page and knows what business is being pursued and by whom, duplication of effort is less likely. Additionally, you’ll minimize effort spent on less attractive opportunities, and instead optimize the effort spent landing high-quality opportunities. Given that most firms’ resources are currently stretched, visibility by the partner group to the inventory of concurrent active opportunities will enable you to make more informed resource trade-off decisions.
Start here and now
Although there are many ways to eat the large-opportunity-elephant, I recommend the following:
* Prepare your pipeline. Under the leadership of a managing partner, a designee should compile an inventory of all the partners’ active opportunities. Group them according to final/proposal, qualified leads, and unqualified leads.
Although it may seem like extra work, applying structure to a disorderly list will add efficiency and profit over time. Focus on the opportunities of most interest – the idea is not to grab anything and everything, but to systematically assess potential and fit.
* Take inventory. Assess your current clients’ needs, and the people and resources you have available to manage the work.
* Aim high. Work the top of your client list – the largest and most important clients. Conduct an internal client review to ensure that you’re not making the mistake of ignoring the “golden oldies” in favor of newer work. Remember, if it isn’t you focusing on these ongoing opportunities, it will be somebody else.
* Prudently prune. Prudently prune the bottom of your client list. Take steps to assure a “soft landing” for these clients, shifting them to less experienced hands in your office, or recommending them to other firms.
Coming out on top
One of the most important strategies that you can pursue during this flush market is to identify the shape of your preferred client base when things slow down. It’s not enough to hold a basket out and catch what falls in; your opportunities – both with existing as well as new clients – must be strategically assessed and pursued.