The key takeaways from this session
Diversifying and positioning your products and services: where to start
This is a summary of an ACCA Practice Room hosted by Heather Smith , Australia, Lock Peng Kuan , Malaysia, and Robert Belle, Kenya.
As accounting and audit services become increasingly automated, small and medium sized accountancy firms are thinking of their core services more like a commodity and are turning to other products and services to keep clients and margins happy.
But selecting and expanding the range of services you offer isn’t simple. First off, there’s a lot to choose from. Do you offer tax accounting? Advisory? Do you help your clients go digital? Or offer them training? It all depends.
It’s important to understand that diversifying and positioning your products and services won’t look the same for everyone - mainly because every firm is different. But here are some key questions to ask yourself before you begin.
There’s no point offering new services or products just because everyone else is doing it. That way lies failure. As does throwing everything at growth. Practice leaders should be more specific about the ‘why’ of diversification and growth. The first question to ask yourself is ‘what’s the purpose of my firm?’ If you can answer that, it’s likely that you will reach to expand into areas that are right for you. Just because you can do something doesn’t mean you should. New products and services should be in line with your purpose as a firm. Let’s face it, smaller practices are never going to compete head-to-head with the Big Four across the board. But they can offer clients real specialization - for example, IPO preparation or SME advice - and they can also offer an intimate client experience.
You don’t necessarily have to employ lots of people to grow or diversify. But what you’ll always need is a strong network. Lockdown showed us that accountants are often at the center of local small business sometimes acting as growth hubs for groups of businesses. They understand how small businesses work and are often connected across a range of areas including legal and technology. Having a strong network in place can help with the heavy lifting.
The battle for talent is real. It’s key that you have the right people in place to launch and continue your new services and products. But it’s important to remember that the very action of broadening your offering can attract new talent and help keep current talent interested. Advertising what you’re up to internally and externally will help attract and retain those who want a different and more meaningful career.
After you’ve worked out the true purpose of your firm, you then have to select your areas for expansion. The first step is to work out whether what you currently provide is done so consistently and ask yourself how you deliver that consistency. That will give you pointers on your strengths. The next step is to talk to your clients. What do they really need? What would add value for them? Is what they want a ‘nice-to-have’ or a ‘must-have’? Does it enhance your existing offering? Does it add to your clients’ journeys? All of these questions are key to identifying the right areas to move into. Your biggest challenge is likely to be thinking like a business while still being wedded to your compliance mindset. But taking the time to talk to your clients can help overcome this instinct.
The first and best thing you can do for your clients is to identify their pain points by talking to them and explain where your products or services can help them. Nothing beats a face-to-face chat.
Pricing is always a point of difficulty. It’s rare to price something too high - the problem is usually pricing it too low and setting an unhelpful benchmark for your services. There are options to help you find the right price point to introduce your offering though. You could get some clients to trial it cut-price and give you substantial feedback. This helps you ride out teething problems and gives you the information to hone your offering. And you can have individual discussions with clients too - pricing doesn’t have to be a on-size-fits-all job. Keep your costing transparent and tailor-make pricing for your clients’ needs if you can. That way your pricing structure will stay sustainable.
Diversifying products and services can seem like a steep mountain to climb. Our experts’ final words of advice?
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Key takeaways from Practice Room session on attracting talent for future success
ACCA report on Gen Z and the future of accountancy