One million dollars. (Cue Austin Powers’ nemesis, Dr. Evil.)
Some firms surpassed that number a long time ago and have set a new goal of $2.5 million. For other firms, a million dollars seems like a far-off dream, because they’d be thrilled beyond belief if they could just meet their current goal of $300,000.
Which illustrates my point: A million dollars is just a number. Granted, it’s a great number, but it may not be your number.
So…what is your number?
Well, that’s where The Million Dollar Firm comes in. Think of it as your new accounting firm strategy. Not sure what it is? Let me fill you in.
Defining The Million Dollar Firm
Think about your revenue model for a moment. Would you say it’s based on the products and services you want to provide to your clients…or has it morphed over time into being defined by the wants and needs of your clients?
Maybe your firm is a little more traditional and includes taking on any customer who walks through the door (or finds you online). Or maybe you’ve been a Rootworks member for some time now, and your approach is a bit more modern: You’ve defined your ideal client and offer the products and services you want to provide.
No matter where you are in your modern firm journey, The Million Dollar Firm is the accounting firm strategy that can help you reach your goals by creating a clear vision and plan for your business. If you and your staff are feeling overworked and/or underpaid, and you’re not sure how to get started with making changes, The Million Dollar Firm approach will give you the strategic building blocks you need to set goals for your firm and the motivation you need to stay on track.
Setting a clear firm vision
Traditional accounting firms tend to struggle because there’s no clear vision or firm business plan. They rely on outdated firm business models. You know the ones: Taking on any client who walks in the door, seemingly never-ending tax seasons and miles-long client lists full of too many 1040 clients.
The Million Dollar Firm is the accounting firm strategy that helps you create a clear and consistent vision. It helps your firm…
- Clearly communicate with your staff and client base.
- Balance your revenue streams with packaged product and service offerings.
- Say yes to the right clients and no to the ones you don’t want to serve.
- Reduce the number of hours spent on returns during busy season.
- Be confident in the value you provide to your potential and existing clients.
The goal of The Million Dollar Firm isn’t just to hit a million dollars (remember, it’s only a number). It’s to help your firm create long-term goals for long-term success. So, let’s talk about the steps you can take to implement The Million Dollar Firm.
Using The Million Dollar Firm calculator
Before you can start implementing this accounting firm strategy, you have to know your starting point. And you can determine that with The Million Dollar Firm calculator. (Rootworks members: You can access this in our resource library here.)
As the great Maya Angelou once said, “You can’t really know where you are going until you know where you have been.” And it’s true. You can’t set goals and objectives without knowing your current situation (and the past chaos that led you there).
Fill in this calculator with the number of clients you have, their average and monthly fees, your employee costs, and general and administrative costs. This will show you where your firm currently stands with revenue and expenses. Then, use this information to set your goals. Remember that The Million Dollar Firm just represents a number. It doesn’t matter if your number is $300,000 or $2.5 million. Set a relevant—and attainable—number for your firm.
Laying the groundwork
Once you’ve determined your number, it’s time to put this accounting firm strategy to work. Using the information from The Million Dollar Firm calculator, you need to define your:
- Ideal business model. This is knowing WHO you want to serve, WHAT products and services you want to offer, and HOW you’re going to deliver those products and services.
- Revenue goals. You’ve defined your number, but how will you get there? Are you increasing fees, removing non-ideal clients or offering additional services?
- Ideal clients. These are the clients you love to serve and are good at serving. They pay on time, use your tech stack and take advantage of the services your firm offers.
- Core services. What products and services do you want to offer? This is your chance to define them. Want to offer fewer tax preparation services? Now is the time to determine what services fall under your business model.
After you’ve defined these four key areas, you need to work on your ability to say no to anything that falls outside your business model. Remember, it’s OK to say no. It’s the only way you’ll be able to take on those crucial ideal clients. It’s also the only way you can continue to offer the products and services you want to offer—instead of extraneous services demanded by non-ideal clients. And most important, you’ll stay on track to achieve your unique vision of The Million Dollar Firm.
Implement this accounting firm strategy now
If you feel like your firm is struggling and constantly dealing with chaos, The Million Dollar Firm can help you. It’s the accounting firm strategy that acts as your field guide to gaining clarity for the business you want. Don’t let your business happen to you—take control and make it what you want it to be.
To learn more about the real-life practical application of The Million Dollar Firm, come join me at the Rootworks Empower conference in Denver, Colorado, May 1-3. I’ll be having a candid conversation with Rootworks members James and Cindy Buss of Buss CPA. We’ll talk about how they’ve implemented The Million Dollar Firm strategy within their firm. (Special sneak preview: “I realized we would never get anywhere doing 1,000 $250 tax returns. You can’t build wealth that way.” Intrigued yet?)
You don’t want to miss it!