This is the second half of a two-part series exploring how to compete – and win – as a mid-market firm. Previously we outlined strategies to entice and engage top talent, who are key to expanding your business. Now, let’s discuss how to increase revenue.  

Build an underdog strategy to beat the odds

One reason our revenue has grown five-fold in five years is because we’ve chosen to compete in areas where we can add measurable value and avoid areas where we cannot. This includes avoiding most compliance-oriented work, which is largely the domain of the larger firms, and also tends to be lowest margin and least enjoyed work.

We develop specialty service areas where we know we can provide value through expert advisory offerings. We also look for new, innovative ways to serve our clients. For instance, we are the first accounting firm in Canada, (to our knowledge) to develop our own insurance products.  

To us, financial audit isn’t just an audit; it’s an opportunity to add value. This seems to work for our clients – our recovery rates are higher than those of our competitors, yet we retain clients year after year and continue to grow our audit practice because of our focus on value creation.

One strategy we employ is to grow by seeking out and hiring skilled professionals who feel they have plateaued at another firm. We offer growth opportunities as well as training and mentoring on how to adapt to a hard-driving, sales-oriented, entrepreneurial culture. These programs have been successful, with many of the senior people who join us from other firms finding that their happiness at work has grown substantially. It does not hurt that their income has grown as well.

We’re what you might term a “challenger brand”, which has its upsides. Entrenched big-firm competitors can rely on their name brand to speak for them. Our name isn’t widely recognized yet – particularly in some of the new markets we aim to serve – so this combination of strategic hiring, training and mentoring is vital for us to succeed. We punch above our weight because we have to win on merit, not on brand.

Setting up and stepping back

A key way to help a team succeed is by staying out of their way. One of the limitations of a traditional partnership structure is the amount of time that the partners must spend on management issues.

We prefer to have a management team structure, which is not unusual among accounting firms, but our implementation is different. Our management team is streamlined, with day-to-day decision making left to either the managing partner or the chief operating officer. Each of our service lines has a leader and they are given enough latitude to run their practice area independently. The rest of the partnership is spared involvement in the day-to-day running of the firm, which leaves them free to do what they do best – focus on growing the revenue and reputation of the firm as well as offering clients valuable ideas and insights.

This streamlined management structure means we can be nimble and move quickly on opportunities such as an acquisition, a key potential hire or a new business opportunity.           

Another uncommon aspect of our structure is that our compensation system for the partners is 100% subjective (no formula). It is completely based on behavior and this really is the secret sauce to our success.

This culture isn’t for everyone. Our shift from a small firm to the 10th largest accounting firm in Canada has meant that many of our existing staff have had to learn new skills, particularly in sales and other aspects of business development, while many partners have had to learn to let go of their administrative portfolio.

In a time when many professions have commoditized themselves, our focus on creating value for clients by investing in talent first, distinguishes us from the rest of the field. Our formula has yielded positive, quantifiable growth thus far, and we believe it will continue to prove successful in our intensely competitive industry.