If you want to build a successful CPA practice, you need to build one that doesn’t depend on you doing all the work.

That means you need to build a quality team of people you can trust to deliver exceptional services to your clients and who will help you grow your practice.

However, there are six common missteps I see CPAs making again and again.  Do yourself and your practice a huge favor and avoid these:

1. Trying to do all the work.  You want to start building a high-performing team that you can trust to deliver high-quality services.  That will allow you to spend less time producing the work and more time building the practice.
2. Recruiting too fast.  Too often, we recruit employees to fill vacancies without really taking the necessary time to found out if they’re the right people.  The key point to consider is whether or not a candidate has the right attitude.
3. Failing to hold team meetings.  Many practices fail to take time for team meetings, or they organize them inconsistently and poorly.  A well-planned meeting is an important part of the process of developing people and building a team.
4. Firing too slowly.  It’s not easy to let someone go if they’re not fitting into their role.  But hanging on too long to the wrong employee affects the whole practice and can cause problems with clients.
5. Failing to reward excellent performance.  It’s easy to get into the habit of expecting people to do their jobs and neglecting to encourage them to do even better.  Take time to recognize and reward exceptional performance.
6. Thinking of employees as costs.  While employing a staff is a major cost for your practice, it’s important to think about how the staff member you employ may contribute to the growth of your firm.

There you have it, in a very powerful nutshell.  Be smart with your team and your team will do their best for you, helping your practice grow in record time.

Learn even more about growing and strengthening your practice! Check out my book The Ultimate CPA Practice in the New Economy: 10 Secrets to Attract More Clients, Boost Profits and Live Your Ideal Lifestyle.

One of the most crucial skills you’ll need in building your CPA practice is the ability to close a sale.  You’d be wise to sharpen your sales skills and overcome any blocks you have to pinning people down and getting them to make a commitment with their money.

However, it’s also important to find the right balance between being too aggressive and too wishy-washy.  From inside this spectrum, CPAs trip and fall and learn to be better sales people.  Here are five of the most common mistakes CPAs make while perfecting their handle on sales.  Which ones sound familiar to you?:

1. Failing to Close the Sale. Often we may have pleasant meetings with prospective clients after which we let them walk away and “think about it”.  You need to have a process that focuses your prospect on making a decision and signing up right away.
2. Being Too Pushy. On one hand, we may rush people into making decisions.  On the other, we may avoid pressing them at all.  You need to have a system that leads a prospect to making a decision at the right time.
3. Getting Too Involved in the Details. The point of a sales meeting is to get the client signed up – not to start going through their issues.  It’s best to get them signed up and then handed over to the appropriate person in your firm.
4. Failing to Follow Up with Warm Prospects. Here’s a big mistake: Losing touch with prospects who’ve expressed an interest in your services in the past, but didn’t sign up because the time wasn’t right.  You need to have a way of keeping in touch with these people so that you can follow up when the time is right.
5. Failing to Follow Up with Past Clients. It’s too easy to assume that past clients left for negative reasons.  There are actually many reasons why someone may have worked with you for a limited time.  You need to go back to them and try and sign them up again.

Avoid these five mistakes, and you can’t help but grow your practice.

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Are overhead expenses in your CPA firm running away like a wild, untamed beast?

You might be like a lot of practice owners I know, whose success crept up on them — and along the way, so did their overhead expenses. As business got better and better, maybe you started spending more freely on things that seemed so unaffordable in those tough start-up years. You operated for a long time with a tightened belt. As you began to prosper, you delighted in finally being able to put more money into your practice, trusting that it was an investment that would pay off in the long run.

Those investments could very well pay off. However, if your overhead is beginning to feel like a runaway train, it may be time to pull back.

One of the biggest overhead expenses for any small business is payroll. It can sap cash flow from a business faster than any other expense.

Is payroll your runaway train?

Take an honest look. Are you overstaffed? Along the path of growth, you may have hired too many people. Each one of those people costs you money. You’re subjected to registration and record-keeping requirements which can be expensive. You also have to pay unemployment taxes, withhold state and federal taxes (as well as Medicare and Social Security taxes), pay for workers’ compensation insurance, and remain in compliance with safety regulations to avoid injury to your workers.

If you fail to comply with all of the above employment requirements, you could face severe penalties, and maybe even be found personally liable.

Are your people properly trained? Too many employers assume their employees know how to do their jobs. Sometimes, their lack of skills or know-how might be handicapping your practice, and you won’t even know it. Spend time training each of your employees so that they understand their roles and how to perform at an optimal level.

Hire slowly, fire quickly. Don’t hold on to people who aren’t contributing to the success of your practice. When hiring, develop a screening process that includes having several employees interview a candidate. You’ll be more likely to get it right if you let your team members evaluate the potential co-worker.

Be clear about expectations and deadlines. Make sure each and every employee understands what’s expected of him or her, and agree on deadlines together. Follow up to ensure the employee has what they need to complete a task correctly and on time. Never just assume the work is getting done. Inspect results and offer constructive feedback.

Try employment alternatives. If you need help in your firm, consider using a temporary employee from a staffing firm, or hire an independent contractor. You’ll avoid the costs associated with bringing someone onboard as an employee.

When you reduce your payroll expenses, you’ll be making a huge impact on your overall overhead. Lower expenses mean an instant boost to your company’s bottom line.

Learn even more about growing and strengthening your practice! Check out my book The Ultimate CPA Practice in the New Economy: 10 Secrets to Attract More Clients, Boost Profits and Live Your Ideal Lifestyle.

Best wishes,

Salim

Performance reviews with your employees are a breeze when everyone’s excelling. But when an employee has become problematic, it’s not just the employee who dreads the review. Employers don’t look forward to them, either.

In fact, many CPA practice owners avoid conducting performance reviews, because they feel uneasy addressing an underperforming employee.

That doesn’t have to be you. Here are six tips to transform your performance review process into a positive experience for all:

1. No blindsiding. Make sure your employee knows exactly when to expect his or her performance review. In my firm, I conduct reviews annually, typically on the anniversary of the employee’s hire date. Make a schedule and do everything in your power to stick to it. Give the employee a chance to prepare.

2. Don’t scold; be a coach. Assume an empathetic attitude, and remember this employee is not your misbehaving child. This is an adult who depends on their job for their livelihood. Being aggressive or overly critical will put them on the defensive and derail the whole process.

3. Lead with vision. Start by explaining your vision and goals for the firm. Make sure the employee understand how they play a role in that vision.

4. Balance good and bad. Sure, this employee may be having some challenges, but look for and verbally acknowledge his successes and accomplishments. When discussing the negative, focus on the employee’s work and results, rather than making it personal.

5. End on a positive note. Don’t wrap up the review on a negative point. Once you’ve discussed any challenges, return to positive areas. The goal is to motivate the person to continue improving her performance. Let them know they still have your trust and confidence.

6. Have a game plan. Clearly document any problems and establish action steps with the employee. Make sure they clearly understand what’s expected of them going forward.

You’ll know your performance review was a success when the employee leaves the meeting feeling excited about his or her job. Strive for that outcome from the start.

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I recently took a vacation to Kenya. While I was there, I made a point of sending each of my clients a personal, hand-written postcard.

Why did I go to all that effort?

Because it was a good opportunity to be in touch with my clients in a meaningful way. And the response I got from the clients was overwhelming. Here’s one of the e-mails I found in my in-box when I returned to work:

By the way, I got a card from KENYA! Now, that was nice! Handwritten and everything… Please tell Salim how thoughtful that was. He is and always has been such a nice person to work with. Him and his crew!

I often remind owners of growing CPA practices of the importance of staying in regular contact with their clients. In my experience, staying in touch is critical to a firm’s success – and yet, so many practice owners neglect it.

When I do speaking engagements with CPA firm owners, I often conduct an informal survey – I’ll ask how often they get in touch with their clients.

The common response? 2-5 times per year.

In my opinion, that is way too little.

Ideally, I like to be in touch with my clients 18 – 20 times per year – and that’s not including face-to-face business.

You might be thinking, But Salim, 18-20 times per year? That sounds like nagging!

Nagging? Not when you see what it really looks like. Here’s how all those points-of-contact with my clients break down over one year:

Receiving monthly newsletter – 12 contacts

Birthday card or gift – 1 contact

(Note: I advise practice owners to spend up to 5% of their revenues on gifts to customers.)

Card on the anniversary of our business relationship – 1 contact

Thanksgiving card – 1 contact

Thank you postcard – 1 contact

Personal visit to business – 1 contact

Personal phone calls – 2 contacts

That’s 19 right there. 19 contacts without seeming to be nagging.

Keeping in touch with your clients is important. It keeps your firm top-of-mind.

And be sure to inject variety into your program of frequent contact. Use every type of media available – direct mail, fax, e-mail, phone, personal visits. Whatever you do, keep it interesting.

Learn even more about growing and strengthening your practice! Check out my book The Ultimate CPA Practice in the New Economy: 10 Secrets to Attract More Clients, Boost Profits and Live Your Ideal Lifestyle.

Best wishes,

Salim