five reasons it succeeded (so far) despite the pandemic
by bill penczak
everyone is no doubt glad the dumpster fire of 2020 has finally ended and that we have a new year to celebrate. the accounting industry has endured layoffs, pay cuts, further consolidation, and firms continue to seek ways to remain relevant as compliance services become more commoditized and margins continue to diminish. after contemplating the move for the greater part of 2019, in january 2020 i formed my articles of incorporation; in february set up my website; and in the first week of march, left my job running practice development for a firm that had been named the 5th fastest growing firm in the country the previous year to start my own consulting firm.
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two weeks later, everything shut down and i thought i’d made the worst decision in my 40-year career. it turned out to be the best.
fast forward to year’s end, and i have four retainer clients, did a few projects for other clients, and have a healthy pipeline of other prospects. my business associates and advisors continually remind me that my role of helping firms create a sustainable process for growth and margin management became even more important during difficult times. in better economies, companies want to grow more. in tough economies, they must.
as i reflect on the past year, there are five reasons my consulting practice thrived despite a terrible economy, shutdowns, and the other things that made 2020 a year to forget, but at the same time, to cherish. and perhaps lessons learned from which your firm may be able to benefit.
a strong professional network.
over the years i’ve cultivated a healthy network of professionals from literally around the world. part of my posse is work-related, from countless networking events and mixers; but most of my network are the scores of former colleagues with whom i’ve made an effort to stay in touch. as i consider the new engagements i won this year, two-thirds of them came about because a former colleague told me about the opportunity. there’s a lot of chatter about the value of “networking” and whether it bears fruit for most firms. granted, in the process you must kiss a lot of frogs, but a strong network of business associates is, in my opinion, the strongest practice development tool in your toolbox. in my case, my contacts told me about opportunities about which i had no knowledge, so from a sales pipeline standpoint, these prospects were already qualified. i had the endorsement of these referral sources with these potential new clients, and it made the proposal process that much easier.
the lesson here for your firm is that you can’t have too many advocates for you and your firm in the market, and secondarily, you must deliver at least a modicum of quid pro quo. if you want to delve deeper into the topic, you might want to read keith ferrazzi’s book, who’s got your back. the notion that one can cultivate a reputation as a connector, and not from a self-serving standpoint is a powerful one that ferrazzi teases out in this interesting read.
fearless (and continuous) networking.
granted, we have all had to adapt our networking tactics in a world of social distancing. and while zoom calls are not the same as real face to face, they have been a way to remain in contact with referral sources and discover new ones. one client of mine actually invites referral sources to participate in his firm’s weekly sales pipeline calls, which are part networking and part transactional, and i can point to a number of instances where the groups were able to identify new opportunities for each other. some firms, sadly, took the “duck and roll” approach when it comes to networking during the past year, and their 2021 growth will likely suffer as a result. the constant effort of identifying prospects, forming bonds, tailoring proposals is the key to winning new work, and i believe some partners are using covid as yet another excuse not to do so.
the most important aspect of networking is following up and maintaining a dialog. one referral client required six touch points (email, linkedin, phone) before we set our first meeting. with another prospect who i’d already met at a networking event, it required five attempts to set up a meeting. you cannot give up after the first attempt if you believe you have something to offer, and many will take the first rejection as the final rejection, which only results in frustration—and no results.
a clear definition of the value proposition.
when it comes to personal brand and my consulting firm’s value proposition, i eat my own dog food.
that is to say, i have a well-defined definition of what distinguishes me as a professional and a clear and concise message about what i do, for whom i do it, and why it matters. guiding client through this process for my entire career has taught me the value of doing so for my own consulting firm, as i don’t provide the same services, the same way, as most other consultants, and need to present a cogent snapshot of what i do and how it helps companies grow revenue and margin.
one of the most difficult skills to home in professional services is defining what makes you or your firm different, unique, or relevant to the client or referral source. i’ve helped craft more than 200 professionals’ personal brand statements in the past few years, and a commonality is that most people in general have a hard time talking about themselves, for fear of being perceived as a braggart or a blowhard. the key is to tell stories, share examples, or talk about how you were able to accomplish what you did—not just what you did. and always answer the question that potential clients always have: what’s in it for me? if you are interested in the personal branding format that i’ve used for the past 10 years with other professionals, reach out to me via my email below and i’ll be honored to share it with you.
the courage to walk away from bad prospects and bad engagements.
as professional service providers, our only two assets are our daily hours and our accumulated experience. bad deals and bad prospects are the vampires of our time asset—they suck them dry. the proposal process can be the most telling aspect of a burgeoning relationship, because if the prospect changes their mind repeatedly, can’t remain focused, wants to quibble over fees and hours during the honeymoon period, it will never improve once you’re married. the same thing goes for bad engagements. i walked away from one earlier this year when the client would take none of the advice of any of his consultants, and his bi-weekly status meetings were all like a soliloquy from king lear. i don’t always have the right answer, but in this case, the advisory group did, and he chose to ignore it. i found the process frustrating and it would lead to nothing but more one-way meetings. i had better respect for my time than he did, and we parted ways, without malice.
as your firm is considering your new business targets, you may have to answer the tough question, “are we right for each other?” i had a tough conversation with the head of one firm’s nonprofit group, who had a close rate that was half that of the firm’s other industry groups. they weren’t winning because they were chasing engagements that were too small, too political, or out of their primary wheelhouse. the following year they were more mindful of how they invested their time on pursuits, and this year they are tracking to have a much-improved close rate.
converting fear into drive.
inaction breeds doubt and fear. action breeds confidence and courage. if you want to conquer fear, do not sit home and think about it. go out and get busy.
–dale carnegie
fear is a powerful motivator. when working for someone else, there’s some assurance that you’ll get paid every two weeks, that your family will be protected by medical and disability insurance, and that there’s a built-in support network of co-workers to shoulder the work and emotional burdens that inevitably arise. when you are a sole practitioner, you have none of those comforts or assurances. the process of starting my own consulting firm has enhanced my respect for those brave enough to venture out on their own, or the entrepreneur on the night of the 14th wondering how they’ll make payroll the next day.
when i first started my firm, my friends kidded me about the “easy life” of working for myself. even though i don’t keep timesheets (value billing), i’m pretty sure i’m working more hours than before, but it doesn’t feel that way. the reward-effort formula is a lot more linear, and i’ve grown into a comfortable cadence of my client work, prospecting, and staying connected with my network.
there have been countless conversations about whether cpa firms are what my friend jana carpenter refers to as “lifestyle firms”—where the base partner compensation makes for a pretty good lifestyle, and the added effort of growing one’s book of business falls by the wayside, or the sentiment on the part of some partners that growing the firm and replacing clients falls into other partners’ purview. holding partners more accountable, not predicated on fear but a greater sense of drive and urgency, should be the mission of every managing partner who wants to continue to grow their firm and remain relevant in the near future.
2020 was indeed a strange year. i worked from home for most of it because i no longer had an office to visit. i feel blessed that it was a success, despite all the headwinds, and i’m grateful to my professional friends and my network for providing me support, encouragement, and opportunities.
here’s hoping that your firm is similarly blessed in the new year.