You may have seen a rise in your profit margin or have expanded your customer base, but is your accounting firm ready for the next level? Before you go ahead and take on more staff or increase your expenditure budget, you need to be sure that your business is ready to scale. Here are 3 tell-tale signs to factor into your decision making.
3 signs your accounting firm is ready for growth
With business expansion comes more responsibilities and you need to be sure your firm is ready. Sometimes the critical factors that indicate readiness are hard to quantify. If, after much consideration, you are sure the following signs are clear, maybe it’s time to take the next big leap.
You’re forecasting a positive cash flow
Scaling will immediately increase your costs but, it is necessary to grow your accounting firm. However, this increase in costs needs to lead to a bigger increase in profits. You need to have a strong accounting model that will allow you to reliably forecast future cash flow a month ahead or even a year or two down the line. In addition, your forecasting should also be able to factor in a change in variables and costs to be able to alter predictions.
You’re turning away clients
If you have a robust client list and are unable to take on any more, scaling is a viable option for your accounting firm. Every client you turn away is a lost profit opportunity and means that there is a demand for your services which needs to be met.
You have a core team of dependable long-term personnel
Being in the service-oriented business, your accounting firm has a dedicated team of employees (outside of the management team) committed to serving the needs of the clients and who have bought into the values and mission of the firm. With this core group of long-termers behind you, you can confidently consider scaling your practice. Your accounting firm should also have a clearly defined mission statement and ethos for future employees.
Whether you want to find new revenue streams to increase cash flow, expand your clientele network or add to your service offering, DMY & Associates can help you identify avenues to scale your accounting firm. Get in touch today!
Related Tag: Accounting Firms for Sale