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By Gale Crosley, CPA
To understate the situation, the rules governing
opportunity development for CPA firms have changed dramatically.
What's different? Almost everything.
When the Sarbanes-Oxley Act of 2002 became law, we knew
we were dealing with a set of rules that would guide how and what kinds of
services CPA firms delivered. But what many CPAs didn't anticipate is that the
rules have created a regulatory environment that is significantly driving new
marketplace dynamics. As a result the question is no longer simply,
"What can we do and not do?" but "How will the market respond to our
offerings?" And then, "How do we develop and close opportunities in this
new and uncertain milieu?"
Here's the challenge: In the past, we operated within a
fairly predictable marketplace with a predictable client set, predictable scope
of work, predictable competitors, predictable pricing schemes and predictable
target markets. That's been replaced by an all-new set of conditions that
leaves us with two options: To proactively anticipate and develop opportunity,
or to react, struggling to catch up to the changes.
Key Word: Cohabitate
How we seek and acquire business is fundamentally
changing. Not so long ago, XYZ Firm would present itself before a prospective
client, claiming to be the best firm in town. Now, XYZ is getting referrals from
other CPA firms because these firms have been "conflicted out" of some services.
This redistribution is leading firms to limit and restructure their offerings
and to recommend others, including past competitors. The fittest firms, those
most likely to survive and thrive, are responding by improving their cohabitation
skills. Enhancing affiliations and alliances will be key to many firm's future success.
This seismic shifting reminds me of the technological
revolution of the 1980s, when IBM was lord and master over the burgeoning
computer kingdom. Today, a wide variety of global vendors work together to
determine solutions and package them for more sophisticated solution-oriented
buyers. This highly evolved go-to-market strategy has benefited participants of
all sizes. Similarly, in the CPA profession, our individual fiefdoms are evolving
into a larger interdependent ecosystem, respectful of the new rules, and seeking
to find ways to cohabitate without conflict of interest.
Another central change before us is in the way decisions
are made at firms. In the past, operational management could be counted on to
set and enforce policy. Now, boards of directors, audit committees and CEOs are
evolving into more visible and proactive decision-makers, who have different
objectives and represent more sophisticated organizational decision-making
dynamics. By the way, these changes are not limited to public firms, but are in
play in private settings as well, although they do not technically fall under
Sarbanes-Oxley.
Opportunity Development Skill-building
Beyond cohabitation, I also recommend that firms optimize
revenue by honing their ability to develop opportunities effectively with boards,
audit committees and CEOs. Methods include external training and sharing of the
firm's rainmaking best practices. Through education, communication and
interdependence, all ships will rise with the tide, optimizing opportunities
within the constraints of the new rules.
Another key strategy is to proactively seek opportunities
that correspond with your identified market niches. In order to optimize your
revenue stream in the 21st century "Get out there and grab your share"
just won't cut it. Rather, get out your lead generation playbook and review your
most successful plays. Mobilize small, specialty teams to respond to industry
niches and needs. Identify your areas of influence and perfect them. Vertical
(industry) niche development continues to be a much more efficient model than
horizontal (community based) lead generation.
Is Our Ship Coming In?
This environment has driven a heightened awareness among
business buyers that CPAs are much more than bean counters that audit and
complete tax returns. We are increasingly - and rightly - perceived as
high-visibility financial service providers. As a result, corporations are more
receptive to leverage our problem-solving and counseling abilities.
Inside the profession, we've been preaching this gospel
for years. Now the business-buying public has recently become more aware of the
critical role played by CPAs in the financial and operating results of a
business. We have an opportunity to capitalize on this new attitude, becoming
the business advisors we have always wanted to be - counseling boards of
directors and audit committees, and building operational and efficiency
enhancements as never before. Yes, we are operating within a tighter rule-set.
But the value is still enormous regardless of which set of offerings you chose
to provide.
We are, in a sense, on a path of accelerated development
of go-to-market strategies, caused by the almost sudden upheaval in predictable
and long-standing market patterns. When CPAs speak in the post-Sarbanes-Oxley
environment, CEOs and committees are listening like never before. And this is
likely to continue to increase with time. And we must act promptly yet
deliberately, taking measures to avoid squandering this historic opportunity.
As large pieces of business change hands, and more opportunities are driven down
from the high end to the middle of the market, those CPAs who focus on these
fundamentals - cohabitation, developing skills with larger opportunities,
effective vertical lead generation, and continuing to up-level business advisory
skills - will be the revenue growth winners.
Gale Crosley, CPA, is founder and principal of Crosley + Company, and consults
with CPA firms on revenue growth issues and opportunities.
Contact information:
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Video: Gale Crosley discusses Growing the Practice 
