When it comes to growing a business, particularly in the accounting industry, there is a fine balance between the number of clients you have and the number of services you offer. Understanding this balance can be the key to increasing profitability and long-term success.
If you are just starting out, chances are you have a low number of clients and a low number of services. This is a natural stage, but growth requires strategic decisions about how to expand.
One common mistake I see is firms offering a wide range of services but struggling to attract enough clients. This often leads to diluted focus – spreading yourself too thin across too many offerings without a strong client base to support them.
On the other hand, if you have a high number of clients but only offer a few services, this can be a sign that you have developed a strong core product. Whether it is tax and accounting or another core service, this is a solid foundation to build from.
The real sweet spot – and where profit per client skyrockets – is when you have a high number of clients and a high number of services. This allows you to maximise the lifetime value of each client, deepening relationships and increasing revenue.
Looking back, my mistake in the early days was trying to expand too quickly in terms of services before ensuring we had an adequate number of clients. If I could give one piece of advice to firm owners, it would be this – build a solid client base first, then strategically introduce additional services when the time is right.
By maintaining this focus, you can ensure sustainable growth and long-term profitability.
