Growth is generally viewed as a positive in the business world. Some of the most successful stories in history are about companies that started from humble beginnings and grew into massive, global enterprises: Meta, Airbnb, Block (formerly Square), and many other examples.
But there’s a darker side to growth that’s less discussed or portrayed in media: if a company is unprepared for rapid growth, it can cause permanent damage that ends up having the exact opposite result. An accounting firm, in particular, can suffer some serious consequences of being unprepared for growth.
You can never be totally certain your firm is ready for growth at a specific level, but there are some common signs we see in firms across all kinds of industries. If you’ve observed one or more of the situations below, there’s a good chance your firm is prepared to take on more clients and expand operations.
1. Team members have enough or too much work
This first sign is applicable no matter how many people you have on your team and whether they are working as contractors or full-time employees. The best way to gauge their workload is simply to ask them, but not all members of your accounting team will be open about their specific workload. Some professionals feel uncomfortable talking to their supervisors about being too busy or not being able to handle things.
However, there are certain signs to look for. Consider how quickly they’re able to respond to correspondence or how long it’s taking them to complete normal requests. In some situations, tasks that normally take a day or less might stretch into a longer return time. If you notice this happening with completely different people or parts of the business, it’s a sign you may be ready for growth.
2. You’re getting enough sales calls to keep the team busy
You should also pay specific attention to the workload of the sales team. Do they have a lot of inbound meeting requests without having to engage in lots of prospecting every day? Are your reps filling their calendars with sales meetings pretty easily?
Activity levels for salespeople are a huge indicator of the overall health of the business – similar to a canary in a coal mine. If they are busy and active, it’s also a sign your firm might be ready to grow. If your sales team still has plenty of work capacity, you may need to refocus on tactics and strategies before deciding to pursue growth.
3. Efficiency and overhead metrics are steady
Just because your team and your sales staff may already be at capacity doesn’t necessarily mean your business is ready for growth by default. You also want to look at internal metrics that measure how efficient your team is at delivering services and completing tasks in the normal amount of time. It’s possible to discover a situation where your accounting firm already has a good amount of work, but things are slipping with the performance and delivery of that work.
This is why you need to also be monitoring internal metrics for accounting firm performance. Be sure that your team is still meeting most of its goals, even if they are busy. Otherwise, pursuing even more growth could lead to a situation that puts undue stress on the team.
4. You can easily meet expenses and save or invest
One of the most common signs of a healthy business ready to level up is plentiful amounts of cash on hand that can be used as an emergency fund or re-invested into the business for internal improvements. If you don’t have any trouble meeting monthly overhead and you’ve spent some time wondering about the most prudent way to handle cash flow that doesn’t need to be spent directly on the business, it’s a good sign that you are ready to grow. However, this shouldn’t be the only sign because plenty of smaller businesses reach this comfortable level of healthy profits and never go beyond. There’s no right or wrong option – it’s all about your personal goals and operating style as a business owner.
5. You have strong processes in place for services
In an accounting firm ready for growth, managers, executives, and employees all have a strong process for each of the most important things the firm does. A strong process is defined as one that’s clear and easy to explain, repeatable, and able to scale to be completed at much higher volumes. Without strong processes serving as an anchor, growing your firm will put a great deal of stress on the team and cause mistakes and communication breakdowns. Before you commit to growth, spend some time reviewing relevant processes to ensure they’re steady enough to handle an increased volume.
Approach growth tactically for the best results
We often see rapid growth glamorized as the best and only option for any business looking to be successful. But many of today’s business experts are pushing back against the startup-leaning philosophy of growing as big as possible as quickly as you can.
If your accounting firm is in the right place, growth can be a great thing that takes your company to new heights and gets you closer to your goals. Just be sure you have the characteristics of a company that’s ready for growth and the tools needed like an all-encompassing accounting practice management software suite to streamline multiple areas of the business.