Strategic Planning to help our client double his revenue and get out of debt.
Business Automation, Business Growth, Business Strategy
Like many firms we work with, the owner of this tax practice had a vision for building a bigger company - he just didn't know which direction to grow in. While he had some general direction he wanted to go in, we were able to show him a direction that would make his company stand out.
Like many of our clients, the owner of this tax practice approached us because he was in need of a business strategy that would help him determine the next direction for his company. When we began working with them, the company sought incremental growth but ended up seeking a much more aggressive strategy with a more complex yet effective business model.
This tax practice had about 10 years under its belt with about $300k in revenue. The client had about $100k in friends and family debt and was looking to be able to pay that back with interest in the following year. He had 6 employees, and he was a vital part of daily activities. He asked us to come in an help him double his revenue. He know that at some point he would like to reduce the number of hours he was working, and knew that at some point, he might like to sell the practice. With him as the primary producer in the firm, that wouldn’t be feasible.
As many entrepreneurs, he was central to the company operations, and a result, the company was undervalued in terms of its potential. When an owner is the main person that is doing the work, if the owner is the one who is leaving the business, the business can no longer operate. As a result, it has little value beyond the value of its assets. When the owner understood this, he understood that he needed to make changes in the business in order to get himself out of being the primary producer.
Further, there are many, many tax firms in the marketplace. From the product perspective, there is very little differentiation between them. Advertising for firms like this can be quite expensive so as a result, many tax and accounting professionals rely on networking, personal relationships and referrals in order to get more business. So while the business owner might not be the primary producer, he was still the primary business development professional. Like many experts in their field, his interest was not in doing the sales activities, but rather, focusing on the work.
His goal for us was to help him develop a plan that would simply double the company revenue.
We began looking at the landscape of the client’s industry in order to get a good feel for where opportunities might exist. What we learned was that most of the larger firms we were presented with serving the needs of medium and large businesses, while the smaller firms tend to serve the needs of the very small businesses, but were limited in their ability to provide services, resulting in limited revenue opportunities and limitations in capacity.
Furthermore, there are specific segments of the small business community that are successful – able to provide the company with sustainable revenue – but are underserved. These companies generally don’t fit the profile of the businesses that are mass marketed to and tend to do business strictly on relationships. They tended not to be extremely technologically engaged but are sharp business people none-the-less. Furthermore, this is a growing population.
Secondly, we evaluated other providers that could potentially serve this market in order to learn about what their challenges are. We learned that they share similar challenges were our client has expertise.
As a result, we developed a strategy for the client that would allow them to exploit their expertise and increase the company’s capacity to serve the discovered market segment. When implemented, the plan would provide the client with an opportunity to expand his business exponentially. This business model enabled the client to step out of daily operations and no longer be central to operations, enabling the business to be able to operate without his ongoing oversight.
Processes and systems for monitoring them were established that would ensure that the same high level of personalized service was provided without losing clients while going through the change.
With a solid plan and direction, the client was able to draw from his network and raise capital in order to put the plan into action.