seven steps for newly formed midsize firms.
by steven e. sacks
the new fundamentals
there has been talk about consolidation within the accounting profession for the last several years. will the big 4 become the big 2, or will there be the big one?
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or, on the other hand, will there be a combination of regional firms whose size will be in the neighborhood of the top 10 or top 15 firms that are considered super-regional firms – and who may consider themselves direct competitors to the big 4?
how will this impact smaller firms (let’s say $3 million or less in revenue for the sake of this discussion)? will they look to go on a parallel track and seek combinations resulting in what is not considered medium-sized firms? will the medium-size firms then face the same challenges as the large regional firms that now compete with the big 4?
“it is better to spend money like there’s no tomorrow than to spend tonight like there’s no money.” – pj o’rourke
if there is a tidal wave of new medium-size firms, what will be needed for them to succeed?
here are a few things newly formed midsize firms should consider to increase their competitive standing. they will need to –
- align their multi-office operations into one overall strategy
- emphasize niche services and identify new industry sectors
- innovate and energize their marketing and business development approach (the “we” and “us” tone on their websites will need to be replaced by the “you” and “your” theme; yes, habits are hard to break)
- identify where there may be conflicts of interest faced by other firms, and your firm can provide the other work.
- streamline processes and operations (e.g., not signing a long-term lease renewal when you have a younger staff that wants work flexibility outside of the office)
- evaluate existing firm management to see if it is supportive of the overall strategic plan
- consider joining an accounting firm association whose composition reflects similar philosophies, goals, and practices.
keep in mind that when firms combine to form a new entity, the existing client base wants a level of comfort that it will still be served with the same level of commitment, accountability, and responsiveness it has been accustomed to.
both firms should recognize and understand that business is now global. so the new strategic plan should incorporate international goals, strategies, and priorities. and be sure the firm’s message is clearly conveyed by everyone, irrespective of their level.
the papers are signed. what now?
there are so many possibilities and opportunities you can avail yourself of now that you have an infusion of resources from the merger or acquisition. i suggest that the marketing and business development teams work in tandem to compose and promote the information, experience, and knowledge of the entire staff. this means promoting those areas of special competence that provide niche services and key industry sectors, obtaining testimonials, and encouraging the younger staff to look for more business opportunities.
you may or may not change the name of the new entity, but surely you should work on developing an awareness campaign, articulating your firm’s distinctiveness, and discovering ways to better position your firm competitively.
finally, as you establish a stronger presence, you can employ recruitment tactics you have never before considered.
warning: don’t think your job is complete when the agreement is inked.
au contraire.
the heavy lifting has just begun.