By Kayleigh Padar
Most firms face “critical periods” as they grow in which new challenges appear, Karbon’s recent Practice Excellence Scorecard report finds. However, with some strategies firms can prepare for these stressful times and emerge unscathed, the report shows.
The study assessed 250 accounting firms and identified the common challenges firms are facing and how they’re conquering them.
Some of the most common roadblocks to growth occur
- when small-boutique firms reach 6-10 staff members,
- when regional firms reach 26-50 staff members and
- when any firm has existed for 5-10 years.
The study calls these “critical periods” in a firm’s lifespan.
The most common growing pains include challenges related to managing staff and accessing resources.
Depending on what type of firm you have, you might face different kinds of difficulties, the study reports. For example, when small-boutique firms approach their critical period, they might face issues in hiring and managing employees and identifying the right technologies.
During a regional firm’s critical period, revenue growth typically slows down and staff members are unable to serve as many clients as they used to.
At the 5- to 10-year mark, any type of firm may realize the strategies that used to work no longer do, and find itself re-evaluating its processes, the study says.
The best way to minimize the problems you’ll face as your firm grows is to prepare for common issues early in your firm’s lifespan, according to the study. One way to do this is continuously learning and reworking your firm’s processes as you approach these periods.
“The biggest issue here is the lack of understanding that (the critical periods) exist and the lack of investing in time,” Vacin said. “Those folks who have really spent the time and really invest in those strategies are the ones who get through it.”
In addition, the study says the best way to truly improve your firm is to solve problems with a “systems thinking” approach. This means adjusting processes by looking at everything your firm’s facing instead of solving one problem at a time.
While you might think it’d be easiest to tackle one challenge at a time, that approach actually creates what the study calls a “Whack a Mole Scenario.” Like the carnival game, each time you seem to solve a problem or knock a mole on the head, a new one will pop up. If you think holistically about your firm instead, then multiple issues will slowly get better over time, and it won’t feel as though there’s always an issue to be solved.
By using a combination of these strategies, you can guide your firm through the “critical periods” and come out successful on the other side, the report shows.