Growing Your Firm: Breaking the Glass Ceiling
Anyone attempting to grow their accounting firm larger knows that you can run into barriers to growth. These barriers are often invisible, and it's hard to identify what the cause of the barrier is, or what the solution is to remove them. Here are signs that you have hit a glass ceiling in your firm:
- You feel overwhelmed by your workload. No matter how many tasks you complete, you still have more to do.
- You can't gain traction on new ideas. You have a lot of ideas, but not enough manpower to get them done.
- Your revenue and profit stay the same. You seem to spin your wheels on business development and can't seem to achieve new levels of profitability.
- Your services are not high level enough to produce larger amounts of profit.
- Your team doesn't seem to help your workload. All of the new work and projects seem to fall onto your plate.
The glass ceiling is a firm growth issue. That is, if you feel like you are hitting an invisible glass ceiling, then you are more than likely desiring growth in your firm at some level. Hitting glass ceilings comes from trying to scale a firm larger. If you don't want to grow or do want to build a lifestyle firm, or you are just doing work on the side, then it's likely you won't hit the glass ceiling.
When scaling a service-based company such as an accounting firm, there are inevitable levels of ceilings you will run into. It's inevitable because service is performed by people. As the founder of your firm, you were the initial one providing the service to your clients. The trick to growing a service-based firm is to hand off the service to new people on your team. So, hitting the glass ceiling is often a people problem. Typically, you'll notice these ceilings based upon team size. It's common to feel your head pressed against the glass ceiling just before you are hiring your first team member, when you are at about 4 to 6 people, or when you are at about 8 to 12 people, in your firm. There is no science to this – just anecdotal evidence from my own experience and from leading firms in the Thriveal community.
I've noticed that breaking through the glass ceiling often involves balancing two things (among many others): Investment and Risk. As a firm leader, your ability to make investments at just the right time, or to balance the risks necessary to grow, could be what breaks you through the glass ceiling of firm growth. Let's look at each one.
If you want to grow your firm, then it's good to know that it takes cash to grow a firm. You need to be willing to make some sort of investment to gain additional leverage to grow your firm. Leverage means using more hands to do more work for more clients in a smarter way. Think of breaking a glass ceiling as having a lever resting on a fulcrum. Then, think of the hands of your team pressing down on the lever to push through the ceiling. The lever could be your services, and the fulcrum could be the processes in your firm. If your services and processes are built well, then you may just need more hands to press harder, faster or more efficiently down on the lever. But, maybe you need to beef up all three areas of your firm: the services, the processes and the team. That's going to take some cash injection to do. So, save up some money if you want to invest it in growth. It's often true that you will make investments in things such as services, processes or people, before you actually need them.
If you are making investments in services, processes or people, then you are balancing risks. And, as stated above, if you are making investments before you actually need them, then you have to be serious about the risks you are taking. Let me say again, growing any company means you have to take risks. So, there is a courage component to making investments before you know they may play out well. My partner and I like to review the risks vs. the rewards we expect before we make cash investments in new initiatives. We ask questions like the following:
- What rewards do we expect from this risk that we are about to take?
- Is the potential payoff from this risk higher than the immediate investment we are considering?
- What else could we do with this money if we did not take this risk?
- What do we not get to have by not taking this risk?
With most risks in most of life, a risk is a short-term investment of some sort, in hopes of a long-term gain. So, don't be fooled when a risk lowers your savings account, for example. That may be the exact right move you need to make to break through the glass ceiling. Or not. I'm not saying take all risks; rather, I'm saying to weigh your risks carefully. And, once you have, move forward with the courage to take the risk you think will break you through to a new level of growth.
Breaking through a glass ceiling is like being good at chess. It takes a lot of thought, and a lot of strategy, to get it right. You not only have to consider what you are doing well, but you also have to consider new things you should be doing that you are not doing now. It takes practice, too. If you are ready to break through your glass ceiling of growth, consider taking some small risks or making some small investments in services, processes, software or people, just to see what the outcome is. It feels good to break through that ceiling!