Growing a Self-Sustaining Accounting Practice
Are you running the business or is the business running you? Imagine leaving your practice to go on vacation for a couple weeks. Does the thought make you shudder? How would your business function without you? Would it function at all? While you may believe that having full control of your business is the best management approach, it doesn’t leave you with much freedom. Growing your business to become a self-sustaining accounting practice is an option worth considering. This requires you to start working “on” your business rather than “in” your business. It’s definitely a shift in perspective, but with it comes greater profitability and freedom.This shift, however, also requires a major transition for your business, a transition Doug Tatum calls no man’s land. And Tatum should know after releasing a book of that same name: No Man’s Land: What to Do When Your Company is Too Big to Be Small but Too Small to Be Big. If you’ve considered growing your business beyond its current size and capacity, the following tips will help you better prepare for this tricky transition.
1. Realistically consider your business’s growth potentialNot all businesses must go global in order to achieve success. There’s value in running a small business out of your home and earning a comfortable living for you and your family. But if you’ve considered growing your practice to include a handful of partners and a considerable support staff, then you must stop and realistically consider your business’s growth potential. Tatum uses the example of a great chef attracting a large clientele to a fairly small restaurant. Will that chef’s value be diluted if the same restaurant were to open in three other cities? Does that restaurant truly have the ability to grow beyond that chef’s reach? The same applies to your practice. Does your business revolve around your unique abilities, or could you bring in partners and employees who could continue to offer those same valuable services to a larger client base? Before you consider crossing no man’s land you must have answered this important question.2. Recognize signs you’ve entered no man’s landIf you’ve decided to move forward and take your business to the next level you must be able to recognize the signs that you’ve entered no man’s land. The biggest indicator is a reduction in revenue and a slowing of business. This means your business has grown beyond current capacity and changes must be made, and quickly, in order to see the business through this often difficult transition. Tatum also says businesses in transition encounter a capital gap where many must enter capital markets but are unsure how to proceed.3. Appreciate your changing role You can’t micromanage a self-sustaining business. Eventually you’ll be required to stop performing certain tasks in order to let the business become more independent. Stepping back a bit to let the company take care of itself may be difficult at first, but is necessary for those who want to enjoy the fruits and freedom a growing business provides.4. Brace yourself for a change in the game plan You can’t manage a big business the same way you manage a small business; the result would be a failing business. In order to successfully cross no man’s land you must change your game plan and consider infrastructure changes, new management, and the addition of employees with more specialized skills.
While crossing no man’s land may be difficult, it isn’t impossible. If you determine that is where you want to take your business, you’re certain to get there as long as you’re prepared.If you would like to learn more about starting your own accounting practice, our Professional Bookkeeper Program is the perfect place to start in order to launch a successful business offering valuable services that are marketed effectively. To learn more, order our DVD “Intro to the Professional Bookkeeper Program.” It just may be the beginning of a lucrative future as your own boss.ReferencePerman, Stacy. “No Man’s Land.” 1 August 2007 BusinessWeek.com