Are you taking action to make your firm more valuable? And, does it matter anyway? Look for example, at what is happening in the accounting sector: the value of a firm is directly related to the degree to which the firm has adopted technology. Technology may well be a cost but it is really an investment in the future value of your firm. In fact, the primary purpose of technological change is to drive efficiencies and better productivity that leads to improved profits.
The role of technology in accounting and bookkeeping firm mergers, sales, indeed sustainability, is larger than people give it credence. Doing nothing for accounting and bookkeeping firms is an almost certain path to a loss in the value of the firm.
Accounting firms are a useful case study for others to observe: there are many firms founded by Baby Boomers who want and need to transition; retiring partners are ready to be bought out. The challenge facing such firms is not just about being technology-abled to meet the demands and needs of a millennial business owner but also about the mix of services.
Firms based purely on compliance will face the reality of taking a ‘haircut’ on the value of the practice. Future revenue and profitability will be, increasingly, based on higher value, packaged services. These will be the most successful, profitable and saleable firms in the very near future.
Size does not matter
Size is no longer a differentiator when it comes to taking advantage of cloud-based technology. A sole practitioner can build a valuable firm because she has access to the same tools that the largest, most established firms have. Savvy bookkeeping professionals access client work whenever and wherever it’s necessary and take advantage of productivity gains to upsell higher value services. After all, they are first responders for SMB owners and are perfectly able to apply their core skills of understanding the business to present more valuable business insights to clients.
Building your niche
Another proven way to increase the value of a firm is to build a speciality in an industry niche. Having knowledge of an industry sector is a failsafe way to build lifetime value with clients. It does need doing the work, for example, tapping into industry association websites or member portals to become more knowledgeable within a vertical.