Ron Saharyan is the Co-Founder and Managing Partner of Profit First Professionals, an exclusive community of accountants, bookkeepers and business coaches who are certified in the Profit First methodology to help their clients build highly profitable businesses. Ron has over 20 years of experience in managing organizational growth and built multiple niche staffing companies prior to launching Profit First Professionals. I asked Ron to share some insight about what it takes to grow an accounting practice.
IA - What do you think are the top obstacles preventing accounting professionals from growing their firms?
RS - The top obstacles preventing accounting professionals from growing their firms are customization of workflows, pricing, and hiring.
Have you ever bought anything that was customized? Shirts, suits, windows, cabinets, etc? Customization is expensive! Anything we look to customize carries a premium price tag...except for Accounting and Bookkeeping services. Prospects often dictate to the firm what services they want and then want to negotiate a price. By streamlining your service offerings with guardrails and setting floor pricing, you can better prioritize your customers and align staff properly.
The issue with pricing is NOT that Accounting and Bookkeeping professionals have or should have great lifetime monetary value customer relationships - they do. But too many have very low average annual value customers. A lower entrance point adds up to more customers with less bandwidth for the professional. We need to increase both.
We have all heard that we should always be interviewing. But Firms are often only interviewing when their staff cries “Uncle.” Design your firm to always be looking for a great resource, and, more importantly, to be in a position to afford that new hire should you identify a great resource. Starting and stopping the recruitment process is expensive and time consuming. Too much emphasis is on “hire now because we have to” vs. “let’s be strategic by always having the funds available to hire the next rock star should one cross our desk.”
IA - How critical is a firm's "Tech Stack" in driving growth and what are the key components or tools an accounting professional should consider adding?
RS - The tech stack itself is secondary to having solid systems and processes in place within the firm. Once you’ve mapped out the systems and processes for your firm - on paper, in a Word document, or on a whiteboard or flow chart app - then you can focus on the tech stack that supports those systems and processes.
That said, I believe all Accounting and Bookkeeping firms should have:
- An industry-standard general ledger software, preferably with a streamlined chart of accounts for all clients.
- A receipt-capturing system, like Dext.
- A cash management system, like Profit First. I had to put that in there, but I truly believe this is critical to firm growth and success
- An accounts payable management system, like Melio or Bill.com.
- A payroll system that takes the burden off of the firm. Gusto is great for this, but so is white labeling or outsourcing payroll.
IA - As a trainer, how important is it for a professional to seek outside training to help grow their firm?
RS - On a scale of 1 to 10 with 10 being the most important, I would say a 9. By having personal development as an ongoing initiative, you will get the results faster and without hurting the firm. From mindset to strategy, there are some great trainers/coaches out there. Find a specialist vs. a general practitioner.
IA - If you were a practitioner, what would your plan for firm growth look like?
RS -
- Systematize everything...and document those systems. It’s paramount to do this before you hire your first employee. Beyond the initial system setup, you need to build a culture of systematization which your entire team buys into and helps you maintain.
- Get yourself into a healthy cash position. Build 2-3 months’ worth of strategic cash reserves as well as a reserve to cover the first 90 days’ of a new hire’s payroll costs.
- Hire your first team member. For most firms, this will be an administrative position rather than a technical position.
- Focus on company culture as you continue to grow your team. This will create “buy in” and loyal employees, which in turn will reduce turnover and the stress that goes along with it.
- Continue to recruit and build your team, ideally before your existing employee cries “Uncle.”
- Work yourself out of the day-to-day running of the business and into a high-level, strategic position.
IA - What books do you recommend for firm growth?
RS -
- "Extreme Ownership: How Navy Seals Lead and Win" by Jocko Willink and Leaf Babbin
- "Profit First: Transform YourBusiness From a Cash Eating Monster to a Money Making Machine", by Mike Michalowicz
- "Team of Rivals" by Dorris Kerns Goodwin.
- "Rocket Fuel: The One Essential Combination That Will Get You More of What You Want From Your Business", by Mark C. Winters
IA -What trends are you seeing that today's accounting professional needs to be aware of and how can they prepare for and stay on top of them?
RS - I think one trend is that small business owners are trying to sort out what the "new norm" is. But an approach of “wait and see” is a mistake. An accounting professional can help by conducting an analysis of the new way customers are buying. Does the customer want curbside pick up now, instead of coming into the store? Is the customer expecting customer service via email more than phone now? Customer expectations set the norm, and an accounting professional can get their client ahead of the curve by analyzing how their customers are behaving.
IA - If someone wants to learn more about Profit First Professionals or wants to get in touch with you, how do they do so?
RS - If a firm is interested in membership they can go to https://profitfirstprofessionals.com and click on the apply button. If someone wants to reach me they can email me at rons@profitfirstprofessionals.com.