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Strategic Advisor Blog

Content, tips and best practice for accountants, CPAs and bookkeepers who offer
Strategic Advising Services to small business clients.

Strategic Advising Services: A Step-by-Step Method for Growth

[fa icon="calendar"] Mon, Oct 30, 2017 / by Kathy Gregory

Growth with strategic advising

The accounting industry is changing rapidly, and your clients are turning to you for advice on their business growth challenges and opportunities.

Your firm needs to be able to offer Strategic Advising services confidently and profitably.

The problem isn’t that you don’t want to offer advisory services to your small business clients. Your problem is that you’re not entirely sure how best to do it. You need the work to be scalable. You need it to be profitable. You need it to be manageable.

Instead of looking first to software solutions to solve the problem, start first by implementing a business process. The process will guide the day-to-day work that makes up your advisory services.

Within this post I offer a sample advisory business process, the LivePlan Method, which you can download and use, but I think it’s important to first understand why a process like this matters and how you might go about building one yourself.

Don’t confine your advisory services to one specific industry

A well-designed business process can be industry agnostic, meaning that you can apply it across all types of small business clients, no matter their industry. There is a lot of messaging in public accounting now to “go niche,” meaning you should specialize in one, usually narrow, industry. I don’t believe that’s necessary, and can actually be detrimental to your own business growth. It can narrow your target market too much. It’s best to remain flexible to your clientele, but rigid in scope.

Keep it profitable and scalable by sticking to the scope

Recognize that you can only do so much in a month with each client, and that the work you do must be profitable and therefore scalable. In order to be scalable the business process should contain work tasks that deliver a reasonable amount of small business guidance each month—not everything possible, just enough. Extra services, or deliverables, can be added at additional rates. Creating a menu of additional services is ideal.

Prepare your team to sell seamlessly: Get the dialogue right

An effective advisory process should include sales and engagement steps built in, as tasks. This will ensure that everyone in your firm is able to successfully engage with and sell advisory to clients in a comfortable way. The advisory service should be as natural to your firm as any other offering.

3 steps to establishing your advisory services:

1. Define scope of work

Your first step is to write a scope of work that describes what you think is a reasonable advisory service offering each month—something your clients will benefit from and that your firm can manage, and bill on a fixed fee. Advisory can be many different things, but you must establish and define the set of things you will offer. This should be based on the mix of talents at your firm, and possibly the ideal client type you want to attract.

For a good scope of work, focus on what you want to deliver to your clients each month.

Say, for instance, that you decide your regular advisory services will include:

  1. Help with goal setting and related financial projections
  2. Month end reporting, and possibly bookkeeping services to ensure accuracy of data
  3. Analysis of metrics related to goals
  4. Guidance in understanding the metrics
  5. Help resetting and re-calibrating the business based on monthly performance

2. Outline tasks and price

With your scope of work written, you now have two things to do: price it, and establish work tasks to support it.

Pricing involves knowing your market and establishing a value based price. Tools like Cloud Pricing are great in supporting this effort.

Establishing work tasks is fairly straightforward. A good rule is anything that takes more than 15 minutes is something that should be listed and accounted for. Don’t be worried if you end up with a lot of tasks. You’ll probably have five to 10 hours of advisory work documented in tasks. The tasks become a checklist for the work and a training manual of sorts.

You can download our framework document, The LivePlan Method, as an example. It is a comprehensive step-by-step guide for advisory. It includes an upfront engagement phase, a planning and set up phase, and ongoing advisory steps. The following is a brief description of the purpose and work of each phase. Find more detailed information on specific work tasks and related help files in the LivePlan Method download.

The LivePlan Method for advisory services: A step-by-step process

  1. Kick off
    Frame your advisory relationship, learn your client’s broad business goal, and sell them on advisory. This is the time you set aside to connect with your client and model for them what an advisory relationship with you will look and feel like. In order for them to effectively engage with you, they have to know what to expect.
  2. Plan
    Perform Lean Planning with your client: what do they sell, who do they sell to, how do they sell, and who and what do they rely on to get that done? Here you are gathering the essential elements of their business model, in order to build a financial roadmap.
  3. Model
    Perform historical analysis of profit and loss to establish a basis for forecast metrics. You cannot build a smart financial roadmap unless you do a bit of forensics. What has the business done in the recent past? Do they have a basis for the growth they wish to achieve?
  4. Build
    Build a full financial forecast: profit and loss, cash flow, and balance sheet. This will be used to manage the day to day operations of the business. Use the goals established in Lean Planning, and the historical analysis to build a smart roadmap.
  5. Advise
    This is your advisory monthly meeting, where you will review actual results against forecast and address the business goals and related forecast.

Once your tasks are established, you should assign them to roles within your firm: data entry clerk, analyst, staff accountant, CPA, and so on. The process of assigning the work to roles within your firm will help you understand your resource need and eventually to compare your value based price to your internal cost: your margin. As you scale the work over time, you will hopefully fine-tune it to add margin. As you grow your margin, your profit will increase.

3. Build an ecosystem

The last step is to find toolsets to support your work. You can find researched and reviewed software online, especially at sites like the Quickbooks App Store.

A useful ecosystem of software for advisory is a cloud-based accounting solution like Quickbooks Online, a business planning software like LivePlan, a workflow solution and/or customer relationship management, and a pricing solution like Cloud Pricing.

Growing and scaling

Based on your own unique staff and your particular client base, you will find versions of the workflow that are the most profitable and best suited to your firm. It maybe more transactional and reporting focused. Or it may involve more planning and forecasting. They key though is to stay strict to your scope and charge extra for anything that falls outside of scope.

Developing your own best workflow for client advisory will happen over time, and that’s to be expected. You won’t get it perfect right out of the gate, but over the course of six to 12 months you should expect to see a refinement of your process. If you’ve taken the time to implement a true task based system, your business will benefit.

If you have questions about any of the subject matter contained in this article, please reach out to accountants@liveplan.com. We are always happy to help accountants grow their advisory practice. And if you plan to be at Quickbooks Connect 2017, please come say hi!

Kathy Gregory

Written by:
Kathy Gregory

Topics: Strategic Advisor Method

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