How to protect your firm from the pain of sudden growth
Real life tips on how to keep your business’s growth sustainable
Welcome to a free edition of Start Up To Grown Up: Your source for ideas, insights and tactics to take back control of your business and scale it sustainably and profitably by Heather Townsend, award-winning author of The Accountants’ Millionaires’ Club and Founder of The Accountants’ Growth Club.
It’s a strange predicament right now. Half of the business is humming with a decent pipeline. When I say humming, we are 1 yes away from all the corporate project work we want for 2025. Yes, that decent. The other half has been on emergency measures to kick-start the new business wins.
It’s early days, but the green shoots of recovery are now starting to be seen after 3 weeks of emergency measures; which is both a relief but can bring with it further challenges. We should see rapid growth if the business (and my marketing plan get it right). Much needed rapid growth, it has to be said, but still growth that brings with it challenges.
People often say that too much business is a nice problem to have. Actually, in my opinion it’s a pretty nasty problem to have. It’s all very well saying no to a few opportunities, or exiting a few of the low profitability clients. But this isn’t who we are business owners are wired to be. We know the lean times could be coming, and so, there is the need and mindset to say yes to everything coming at us.
With this potential wave of work coming, my thoughts have been turning to how to prepare for this level of work. You may think this is just wishful thinking. However, if you are going to move your business from troublesome toddler or teenager into a mature adult, then planning for sudden growth is key.
Review and monitor your lead generation
Let’s be honest, your business - particularly if you have been running it for a while - probably has a good idea of its normal run rate of winning new work and when the peaks or troughs are going to be. But how often do you plan your capacity based around this? How quickly do you need to recruit? What does recruit actually mean? For example, that means for me working out how to remove the tactical marketing tasks from my workload.
It’s not just about aligning work wins with your business’s capability to service new work. It’s about keeping an eye on the trends. For example, one of our former clients found that their specialist area had become more price sensitive. Their normal proposal win rate had dropped from 40% to 10%. They realised this fairly quickly and so tweaked their pricing slightly. As a result their proposal win rate shot up to 60%. This new level of proposal win rate had implications for their capacity requirements later in the year. But by being close to their lead generation KPIs they were able to recruit in ahead to minimise any pinch points in demand.
Check your capacity
Is your firm being run too leanly? This is not uncommon within professional service firms. After 15 years of running my own business I am aware that ‘too leanly’ is difficult to identify. Why? Your staff and fee earners will often say they are busy. I would put money on the fact that when you check they will indeed be busy. But the question is are they focusing on the right things? Or are they letting the work fill the time available? Are there better ways of doing things, and are your staff embracing them?
When you see a wave of work coming in there is often the feeling of relief as you know the revenue will rise. But at this point you need to be critically evaluating your available capacity. How scalable is your business? When does service start to suffer because of too much work?
Consider your version of surge pricing
A good way to slow down demand is to price high. Whether for the one-off ad hoc stuff or a widespread price increase. Yes, we are now confident about our fee rises for 2025. If you don’t see a slowdown in demand after a price increase, it typically means you are too cheap and/or you are letting your prospects know too late in the sales process about what it will likely cost to work with you and your business.
Keep the practice/workflow management system up to date.
When people get busy it is normally the admin which gets cut first. For example not updating the firm’s CRM with all the client notes. Or not ticking off what has been done on the firm’s task management or workflow management system. Given that your firm relies on up-to-date information on these systems more management time needs to be given to ensure that your staff members are keeping these updated daily. For example you may want to:
Ensure everyone has an objective to keep the systems updated daily
Do some spot checks to see how well the system is being used
Review the workflow on the practice management system to see if this matches what your fee earners are actually doing
Protect your time AND your senior fee earners’ time
As your business has grown, you will have started to build a leadership team around you. As you get busy, you start to delegate more and more of your responsibilities to your leadership team or others, which is absolutely what is needed. But as the work builds - particularly when a wave of work hits, you and your senior fee earners quickly run out of time. You may not be the bottleneck this time, but it may be your senior team. This means that service levels can drop. Either due to poor quality of work going out the door or a slower response time. Very often, the senior fee earners will step in and do the work of a more junior team member as ‘it needs to be done’. This can then lead to a greater bottleneck at a senior fee earner level.
Know your operational pinch points and measure them
Every business will have pinch points or areas in the workflow where bottlenecks are most likely to occur. For example, if we had 4 new members join in a week, our relationship manager would struggle for time, and the intake of new members would slow down. Therefore, ask your team what would happen if your business took on 20% more work or more clients in the next month. Then, ask them where the operation would break first. Either by processes not being followed or by backlogs building up. Then identify and measure KPIs that indicate when your business is becoming too busy.
Make sure that team members are taking their annual leave
When the workload rises, team members often feel that they can’t take holiday. This then has 2 effects. Firstly, team members become less productive as they become tired and burnt out. And secondly high demand for annual leave at the end of the holiday year. Therefore, ensure that someone looks at how and when team members are taking their holiday. You may need to proactively nudge team members to take them throughout the year.
What is the takeaway from today’s article?
Being too busy is as much a killer of growth as not having enough new business coming in.
What can you do to prepare your business so it can cope with an upswing in new business? Do let me know!
I think back to when I was the real estate management broker taking custody of foreclosures and bringing them up to federal habitable standards for the US Department of Veterans Affairs.
I was continually looking for ways to speed up, and it was about having systems in place.
Heather, reading your article, I sighed with relief that I was no longer doing that.
You reminded me to plan in my own holidays, which is often ignored. Thank you!