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Discussion:Accounting Practice Growth

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Fort Wayne CPA (talk|edits) said:

17 June 2008
There are a large number of threads concerning how best to grow your accounting practice. We have managed to grow our practice from zero clients in early 2001 to $225,000 in annual billings today without much difficulty at all. My wife (And partner, she is a CPA as well) started the business part time out of our house in mid 2001 after our fiurst child (Kayla) was born in June of 2001). She works 20 hours per week off season and closer to 60 during tax season. I joined the firm part time in 2004 and went back to college. I currently work at the firm similar hours to my wife. We currently each work 16-20 hours per week in the summer and the office is closed in Fridays. In December of 2007 we built a commercial office. We had two part time interns for tax season this year. We are adding a full time employee (Also a CPA) in September of this year.

I expect $310,000 in billings next year.

We currently grow by 30-50% per year. I feel that as long as you do a good job, return phone calls, and treat your customers as if they are important, and spend some money on advertising you can easily grow your practice by 30 - 50% per year.

Our growth comes from the following:

1. Referrals. Over the years referrals have allowed us to grow by about 20% per year. We do not "pay" for referrals; however, we receive a fair number of referrals throughout the year.

2. Existing client retention. We have been able to retain a little over 98% of our clients from year to year.

3. Direct Mail. The rest of our growth is from Direct Mail. We used direct mail to get started back in 2001 and 2002. Then we started using it again in 2007 and 2008. Direct Mail works for us. Many marketing people claim that you can get a 1% - 2% response rate for your direct mail pieces. I have never got a response rate that high. People hate switching accountants and generally will not switch accountants unless they are fairly angry at their current accountant. I find that I get a response rate of about .3%. Of those I set up appointsments with about half of them, and 90% of the people I meet with become clients.

I have sent Direct Mail to two lists of people that have been more productive. Direct Mail sent to those people who have recently purchased new houses and to new business owners have been more productive. My response rates on these pieces are about .75% with similar meeting and closure rates.

My direct mail pieces pay for themselves with billings within 6 - 12 months.

I am getting ready to advertise in a local business oriented weekly newspaper and I am getting ready to advertise on the radio. I have no idea if these will work for us. I have also put an ad in the local phone book for the first time. I do not expect this to bring many (If any) new clients.

We have had no luck to date advertising in local newspapers. We have a website/blog that we started earlier this year (SBSCPAGroup.com). This is our second website and to date this advertising has not worked well at all. We have never advertised on television nor have we ever tried telemarketing.

We will spend about $18,000 on advertising this year. I spend about 41 cents per piece on my direct mailings once everything is considered.

We can grow our tax practice very, very easily. Our bookkeeping business has proved harder to grow!

Mike Sylvester, CPA/ABV

Fsteincpa (talk|edits) said:

17 June 2008
Mike,

Believe it or not, there are a lot of folks who actually still use that out dated medium they call the yellow pages. I never advertised in the pages before I bought this practice and I always ask new prospects where they heard about us. Quite a few said the Yellow Pages. I was surprised.

Now, my town is a small community, everyone knows everyone else's business, personal and otherwise. so, keeping our name out there is a good thing.

Print advertising - We always did the local newspaper which comes out once a week. all the preparers do. I think this is more for the people who already are clients actually as I have had only one new person this year that said they saw me in the local paper.

Print advertising part deux - this was first year I advertised in our version of the local penny/dollar saver. I actually received quite a few new clients who came from these ads.

Did our first radio spot and not many new clients from there. Only one, but I view that as more of a Drip marketing campaign that keeps us in people's minds. We are going to run a new ad campaign discussing our non tax services, but we are waiting until after Labor Day as it's summer time and no one is thinking business.

Direct mail - we get a monthly mailing from the county clerks office listing new businesses formed. we send a letter out to each one explaining what we have to offer. Usually get one or two new business clients a month with that.

I have wanted to do the same for new home owners, but have not as of yet. It is on the agenda though and I do expect a positive rate of return on that as well.

Gearing towards the younger kids - Quick cheap returns now, but they get older, marry, have kids and start businesses. I deeply discount kids returns when families already use me. After they graduate and start actually working, I still like to keep the W-2 only kids relatively cheap. I want it to be worth their while to come to me vs turbo tax.

Been thinking of doing the Liberty Tax Statue of Liberty stand out front campaign, but I am going to put my own unique twisted thought to it. lol.

Corptaxhelp (talk|edits) said:

June 18, 2008
I don't want my taxes done by an Uncle Sam or a Lady Liberty who hasn't showered in a week and hasn't paid taxes in more than a decade.

I swear, there was an Uncle Sam on my way to work last season who I could smell at the stoplight before I could see him.

Anyone who is willing to put in an honest day's work has my respect but Uncle Sam should have held out for minimum wage *and* the ability to hose off out back before his shift started.

Lmcdon9822 (talk|edits) said:

21 June 2008
I have tried direct mail for 2 years and I did not get good responses. I may have sent out at least 2,000 post cards and I got 2 responses. Both did business with me and one brought in her son. Advertising in the local free newspaper that is weekly have given me good responses. This year I got 28 calls and turned 16 into clients. I will continue to use the weekly newspaper and only use postcard for my clients. I will try to use yellow pages this year. I did not see any listing for an accountant/financial planner in my area so I will give it a shot. FortWayne is correct. By providing good service, returning calls promptly and making the client feel they are important is key and they will talk about you.

Umk395 (talk|edits) said:

3 December 2010
Buying other accounting/tax firms is the most efficient (not necessarily cheapest) way to grow your business.

TRcpa (talk|edits) said:

3 December 2010
Buying other accounting/tax firms is the most efficient

Albeit your buying the right firm. There are a lot of firms for sale that have no business being purchased at standard industry multiples which every firms seems to sell for. Just makes no sense that on one hand you can buy a firm that fully pays for itself in 3 years vs another that does it in 5+ yet they still seem to sell for the same price.

I believe Fort Wayne's advice is well founded. I personally have found internet marketing to be my biggest new business source. I also an fairly discriminating and up front on my pricing so clients know they are not coming to the cheapest guy in town (to me this is essentially in building a firm with low attrition and higher average fees). My firm grew from essentially nothing 3 years ago to over 175 returns this past year and over 20+ accounting clients. If last years growth continues (I'm expecting it as I've already been lining up new clients ahead of time) I will likely be at the 250 return mark which I feel is my limit as a one man shop considering 40% of my returns are entities with another 30% more complicated Sch C's/E's 1040s.

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