This week I will apply some of the feedback I received from TFYM #012.
Here is how one respondent replied:
Q: What specifically do you like about the newsletter?
A: Cover a range of topics; the true value is in the details and actionable advice you can use to improve your firm today.
Thank you to whoever provided that response as well as all the other entries.
I am going to provide some very direct details and actionable advice today.
I struggled a lot when I started my firm in 2017. That struggle continued until a few decisions and discoveries were made.
Looking back now, the issues were obvious. They definitely weren’t completely apparent in the moment, but I felt and knew improvements were needed.
I didn’t know exactly what the root problem was – so finding a solution was impossible.
If you don’t remember anything else from this week’s newsletter, remember this:
“A problem well-stated is a problem half-solved” – Charles Kettering
Here are three barriers with well-stated problems to help you move your firm forward.
Vision + Strategy
In the beginning, I did not have a clear vision for my firm. I wasn’t able to do any quarterly or annual planning. I didn’t realize I wasn’t alone on that.
Most firms can’t do any detailed planning because the plan building blocks are not clearly defined.
Sure you can say, we want to generate $600,000 next year, but if you don’t know how the building blocks will arrive or fit together, you don’t have a plan. You have a dream.
Good building blocks are uniform engagements that can be stacked on each other systematically and efficiently.
For a 1 – 3 partner firm, you have to narrow what you offer.
You can do ANYTHING, you just can’t do EVERYTHING.
Once you have decided what you will do, you can start the planning process.
I understand that volume of work will come into play here as not all clients will have the same quantity of work. What I am emphasizing here is the type of work you will offer.
If finding your current type of work has been haphazard and built on referrals, it will be darn near impossible to plan for something similar in the future.
If you want to rise to a level of stable revenue, you have to know how you will do that.
Once you have decided on the services that interest you and fit your firm, with the right profit margins, double down on that work.
For the closely related services that you do not offer, find other service providers to partner with who complement your services. You can be a one-stop shop that leverages other providers.
Finding and Attracting Clients
For the first while in my firm, I did no marketing. I didn’t know how to find or attract good clients. I didn’t know where to start. Was it Facebook, Google Ads or SEO?
The marketing channel was not the issue. The true issue was that I did not have an offer.
I had services, but I didn’t have an offer.
An offer is a clearly stated solution for a niche client segment.
Having a clearly stated solution means highlighting your service’s outcome and matching it to the client’s problem. Remember: most business problems are generic, and the services you already offer, with an additional advisory application, will transform these businesses.
If your firm is not in the cloud, you won’t be able to niche your firm. You won’t consistently get one type of client.
You are left to local clients, local markets and local prices.
There are 10000x more doggy daycares in the country than in your city or town.
I just went into this last week, in TFYW #013, so I won’t belabour it too much. But honestly, start taking your marketing seriously.
If we advised our clients, like some of us run our firms, we would be fired in seconds.
Imagine telling a construction client to just wait for referrals and to accept all clients that walk in the door.
Profit Growth > Revenue Growth
When I first started my firm, I focused on revenue. And in my mind, more clients meant more cash flow. I was mistaking increased revenue for increased cash flow.
Revenue is a vanity metric. It is easy to track but provides no indication of the health of the firm or the quality of life of the owner and employees.
Once you have focused your services and client type, increasing profits is your next goal.
Don’t get me wrong – a strategic lead generation plan is important. But knowing how to maximize the profit within your firm will be the difference between being happy or miserable in your firm.
There are three key levers to increase profitability.
You working more billable hours is not one of them.
Focused Services + Offers
If you have followed the steps above, this has already been established. You cannot automate or effectively train + manage your team members if you accommodate every individual need that walks through the door.
The worse question to ask a client during a discovery call is “What do you need?”
Instead, start with “what challenges are holding you back in your business?”
Automation is not strictly using a new app or technology. It is creating a workflow that leverages technology and maximizes the effort of your team members. It is thoughtfully assessing how your clients will interact with your firm, and creating repeatable self-directed steps to enhance your client experience.
Building and tweaking automations takes time. It is never a one-and-done approach. The services you offer will inform what you automate first, as well as the cadence of how often you review your workflows and make improvements.
Billable hours and client work increase revenue from one client. But thorough automation increases profitability across the board for each client, year after year.
The only way to grow sustainably is through investing in your team’s development. Similar to automation, this is not as simple as putting a person in a role.
It starts with you knowing what their role and responsibilities are before they start, providing upfront and consistent training; continually clarifying expectations and available support, and taking an interest in them as humans.
The performance of your team is not determined by how much you can get out of them, but by how much you put into them.
If you expect uncompromising loyalty while the net value of the relationship goes to the firm, you’ll always struggle with your team members.
Engaged team members increase profitability exponentially. They work faster, smarter, and innovate more.
Thanks again for the feedback and the time you’ve spent reading this week’s newsletter.
Build The Firm You Want,