Growing a practice or business is hard at the best of times.
But sometimes there’s more stacked against us than we realise.
And if we don’t have a clear picture of what’s stopping us from growing, it’s twice as hard to know what to do to overcome it.
Over the years I’ve identified 3 Critical Factors that limit the growth and profitability of most practices I see.
- Model: The professional services model is broken
The professional practice model is stacked against growth and profitability.
If as a fee-earner you also have to do lots of non-fee earning tasks (such as marketing, networking, talking to potential clients, billing etc) and yet you only generate fees when you are doing fee-earning tasks, this restricts your ability to generate profits.
- Method: in most cases, the method used for growing a practice is misguided
Most firms focus on growth by looking at ways to get more enquiries from potential clients.
Some spend a lot of time and/or money on marketing to achieve this.
This method ignores the fact that the fee-earners may not be converting as many of those enquiries into paying clients as they could be, meaning enquiries are wasted. If so, time spent on improving conversion rates could give a much higher return than time spent generating new enquiries. It would also be cheaper to do.
Focusing on new enquiries also ignores the other five ways of increasing fee income and profits without needing more enquiries, such as getting more work from existing clients.
Missing out on these other opportunities means you work harder (or spend more) than you need to in order to get the growth you want.
- Mastery: Mastery of business development skills is often missing or not given the attention it deserves.
If getting more clients and/or getting more work from existing clients is a key part of a fee-earner’s role (bearing in mind the professional services model), yet they aren’t trained in how to do them quickly and effectively, then it takes too long to get the results. This means too much time spent away from fee-earning and too few new enquiries or matters resulting from the time spent.
If you feel that the growth of your practice could be limited by any of these 3 Critical Factors, then it’s important to assess:
- What impact is it having on your practice growth and profitability?
- What would be the effect of removing or reducing that limitation?
- What steps can you take to remove or reduce it?