CPA Trendlines

MAP SUCCESS: Molinar on Marketing

What are most important business development trends facing CPA firms today?

For some answers, just ask Russ Molinar, Director of Marketing & Practice Development at Plante & Moran. We did, and here’s what Russ offered up…

1) The maturation of marketing. Marketing in most accounting firms is an “adolescent” — a teenager with increased expectations and demands being placed on the function. The marketing function has emerged from a tactical “write the brochures” mentality to more of a strategic and revenue-focused function.

2) The next phase of business development and sales professionals. Many firms have tried using outside lead generators, with mixed success. Many firms, starting with the Big Four and now cascading down to the national and super-regional firms are looking beyond “lead generation” to marketing and sales professionals to help with sales coaching, sales management, account planning, and opportunity management, among other things.

3) Integrating marketing and sales. Marketing should drive sales, or at least create opportunities for the firm. Many of the marketing tactics often used by accounting firms aren’t linked with sales efforts ? for example, trade shows or event sponsorships to increase firm awareness without adequate planning and follow-up activities to turn those efforts into qualified leads. Firms should be looking to more aggressively and comprehensively link and better integrate existing marketing and sales efforts. Our firm, along with many others, is looking to change the focus to more of a sales, or practice development, orientation.

You can catch Russ and the best of accounting marketing at the AAM
Summit in June. Visit: AAM READ MORE →

PEAK PRODUCTIVITY: Email Makes You Dumb

A survey of 1,100 Britons, conducted by TNS Research, and sponsored by Hewlett Packard, finds that the stuff of modern, instantaneous communications — phone calls, e-mails and text messages — distract them and actually cause them to suffer a greater loss of IQ than if they were smoking marijuana.

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AT LARGE: What Business Do You THINK You’re In?

With busy season ended, accountants and financial managers assess the meaning of it all.

By Rick Telberg
At Large

What business are you in? Or rather, what business do you THINK you’re in? Now that the busy season is over, many CPAs are taking the time to assess and re-assess how it went, how they feel, and what they’d REALLY like to do in the future. So this is a good time to ask yourself if you can readily define your business mission.

What business are you in? Does any of this sound familiar?
“Babysitting my clients.”
“Handholding.”
“The peace-of-mind business.”
“Solving people’s problems.”
“Measuring and improving performance.

[Planning a leadership strategy meeting? Request your FREE Situation Assessment Discusson Guide] READ MORE →

10 To-Do’s for a Partner Buyout

Marc Rosenberg

The days of wine and roses in selling CPA firms for pricey premiums to big-monied buyers are over.

“A host of forces have combined to make succession planning into the ‘Perfect Storm,’”says consultant Marc Rosenberg. “Baby Boomer partners are now 55 to 60 years of age and hence, five to 10 years from retiring. At the same time, firms are suffering from a dearth of staff with partner potential.”

Assuming You Someday Want to Sell Your Firm to Your Partners:

1) Grow and be profitable. Run the firm like a business, building enterprise value.

2) Watch the partner composition. Maintain a good age spread among partners.

3) Revamp your compensation system. Easier said than done. But necessary. Embrace performance-based systems.

4) Weed out the undesirables. It’s tough love for the greater good.

5) Give a bit of consolation. Address and deal realistically with other partners’ fears about a merger.

6) Provide all the benefits. New partners want a say in how the firm is managed, their opinions need to be counted, and to have access to confidential data. But “CPA firms should not be run like democracies.”

7) Transfer clients. “Expect younger partners to ask, ‘What am I paying for with my buy-in?’ The correct answer is ‘clients.’”

8 ) Avoid large buy-ins. “The days of six-figure buy-ins at small and medium size firms are all but gone,” Rosenberg says. “Buy-ins of $25,000-$75,000 are much more common. Today’s young people are simply not willing to pay the higher amounts.”

9) A reasonable buy-out/retirement plan. It needs to be fair to current and retuired partners, but also competitive with other firms.

10) Get them out. “The departing partners should actually retire,” he says. “These days, more and more partners seem to hang around after normal retirement dates, retaining control over their clients and hogging the firm’s partner income dollars squeezing out the younger partners.”

The Rosenberg MAP Survey is offered by Bay Street Group LLC, publisher of CPA Trendlines, here.

TAX SEASON: Key Benchmarks Look Good

The key benchmarks for tax practices look good and strong for the 2005 season.

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SMALL BIZ BITS: Hiring Growth Stalls

Small- and Medium-Size Businesses Turn to Contract Workers

Hiring growth by small business in the year’s first quarter stalled completely, as owners remained cautious about the economic outlook, according to SurePayroll Inc., a Chicago-area provider of payroll management services to businesses with up to 100 employees. And the average paycheck shrank 1%.

California and Virginia suffered the sharpest hiring slowdowns, with near zero growth this year, compared to 7% to 8% same time last year.

The result: Nationally, 3.27 percent of small business workers are now contract employees, up from 2.99 percent in March 2004 and 3.2 percent in December 2004. READ MORE →

VENDER TRENDER: CCH Links with 10-K Wizard

CCH is linking up its Accounting Research Manager with 10-K Wizard to launch 10-K Lookup for SEC EDGAR research. This means that the corporate accounting and financial executives who now rely on CCH’s Accounting Research Manager, will also get access to SEC EDGAR filing detail through a licensing agreement with 10-K Wizard.

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LETTERS: ‘Tremendous Benefit’

From:
Dax Stoner, CPA/ABV, CVA
St. Paul, MN

“As a single member firm, I have to be very efficient with my time. The problem is not getting the business, it’s getting TO the business. Your articles on time, client and stress management are of tremendous benefit.

“You boil it down and give real-life examples of what’s working and what isn’t for other professionals just like me. That’s why I rely on what you do. Nowadays, we get all the technical writings we want with ease; in fact, we are inundated with technical teachings. You talk about soft issues that matter as much or more, like how to use one’s time better, balance work and personal life, and craft strategies for dealing with challenging client situations. In short, you help me run my business better.”
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VENDOR TRENDER: Construction Niche Heats Up

Foundation Construction Software To Add Audit/Review Module

Foundation Software, a developer of construction accounting systems, is pushing ahead with plans to add a CPA Audit/Review Module that would compliment their FOUNDATION for Windows construction accounting software program. The company said it is working jointly with various construction-focused CPA firms to design the add-on.

?After speaking with thousands of contractors and their CPA firms over the years, a common request has been for a quick and accurate method to gather the necessary information easily from a client?s accounting software,? stated Fred Ode, Foundation Software CEO/Chairman. Details at www.foundationsoft.com. READ MORE →

SMALL BIZ BITS: Focus on Start-Ups for IT Sales

First the Good News: Small businesses that are less than 3 years old plan to increase technology spending in the $5,000 to $24,999 range this year, according to Jupiter Research, representing a business development opportunity.

Now, the Bad News: Tech spending will be relatively flat for the rest of the small and mid-size business economy. Forty-four percent earmarked less than $5,000 for technology purchases this year, same as last year.

On the Other Hand: That’s still $5,000 per business.
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