Who you know matters when getting out the word about a new practice.
Marketing Close to Home
|By Anita Dennis, a Journal contributing editor.|
W hen starting a new firm, many practitioners make the mistake of trying to be all things to all people. Angela Williams, a sole practitioner in South Orange, New Jersey, launched her two-person firm by focusing her marketing on groups in which she is known and, as an African-American, by specializing in minority-owned businesses. This concentration on familiar territory has helped her firm expand and prosper in the three short years it has been in business.
MARKETING CLOSE TO HOME
Williams started out as an auditor with a Big 6 CPA firm and then worked for a large corporation in financial analysis and computer support. She began her own business in 1993 after many years of dreaming of solo practice. "I always wanted to be on my own," she says, "but I had to keep working the finances until I got to a point where I could do it."
Williams opened her doors with only a small foundation of clients. "I started from scratch," she says. The firm's first tax and write-up clients were referred mainly by friends and acquaintances from organizations in which she was involved.
One key strategy in her efforts to increase business further is to promote her services in familiar circles. "I read in some marketing literature that if you market to people who recognize your name, you have a much bigger payoff." So Williams aimed to get her name out within community organizations. For example, "if an organization had a bazaar, I got a small table and supported its efforts. If my church had an event with an ad journal, I took out a congratulations notice." She also tried limited mass mailing and telemarketing and achieved good results with them, "but the biggest successes were with groups that knew me." In her community, besides being a trustee of her church, Williams works with her children's PTA and sports teams.
As part of her marketing strategy, Williams created a niche of minority business owners. "I focus on those businesses because the organizations with which I'm involved outside the firm tend to be minority groups, so it was a good fit to market to those groups." Williams specializes in small companies, although she notes that the word specialization doesn't really fit the wide range of products and services represented in this segment. Her clients generally fall in the $50,000 to $1 million sales range, although she has seen many of the smallest ones move up to the $500,000 mark in their first years of business.
Williams is open to all types of business. "I won't refuse any company unless it's so small it can't afford me or if it's unwilling to do some basic, proper record keeping." She has pursued a niche of musician clients, building it mainly through word-of-mouth referrals. To expand her knowledge and contacts in this field, she joined the sports and entertainment committees of both the New York and the New Jersey state CPA societies.
She highly recommends involvement in professional organizations. A member of the National Association of Black Accountants, she also works with the National Sales Network, an association of minority sales professionals that offers seminars to help members promote their services. Williams was asked to speak to the group on accounting issues and was so impressed by its offerings, such as seminars and networking opportunities, that she joined herself. This has been a worthwhile step for several reasons.
"As CPAs, we're also to some degree marketers," she explains, so the group's seminars have been helpful. In addition, working with businesspeople outside her own profession gives her exposure among potential clients. "I find it beneficial to be involved with a group of businesspeople who aren't accountants because I get something out of the meetings and the other members are likely to use my services because there are no other CPAs in the group." Last fall, Williams was honored as entrepreneur of the year by the group, receiving recognition in the association newsletter and her local paper.
LEARNING TO SAY 'NO'
One mistake Williams plans to avoid in the future is accepting every small, struggling start-up business that comes to her. Although it's hard for a new practitioner to turn down clients, she found those entities often couldn't afford the basic services she offered them. Instead, she recommends they go to the Small Business Administration, the Service Core of Retired Executives or the local library for the resources they need. "Very small clients can be a big time burner," she says.
Williams believes the smartest move she has made is to stop trying to do everything herself. She has a full-time staff accountant and outsources her payroll and some secretarial needs, bringing in a full-time secretary during tax season. Williams and her husband have five children under the age of 10, so she instituted her own version of flex time during the last year. She works in her office until 3 P.M. and then goes home to help her children with their homework. (The children's grandmother pitches in with child care during tax season.) "After they go to bed, I tie up my loose ends-although it seems they never really do get completely tied. But that's when I do work that must be done for the next day."
Another step she believes is vital for a small firm is investing in the proper tools, particularly good software and hardware. She has a 100 megahertz computer. "I know there are faster ones, but for a small practice like mine, I'm proud of it." Her staff accountant has a computer, and the practice also has a laptop.
Williams admits to some early mistakes from which she's learned lessons about practice management. One of her biggest errors was hiring the wrong person for her accounting needs early in her practice. "That held me back because I was expecting the employee to perform certain tasks and I had to go back and do them myself. It made for a lot of extra work." The first employee had only bookkeeping experience, and it became clear that was not sufficient. To replace that person, she looked for someone with an accounting degree and with aspirations to become a CPA. Since she wanted to rely on this person to work independently, she believed the better understanding of professional guidelines was essential.
Williams has several recommendations for fellow small practitioners:
- Tell the people you know about your business and your services. "When you work with people who already know you, they will give a referral and say, 'I know her.'" That personal stamp of approval is important to potential clients.
- Try to be involved in at least one state CPA society committee because of the resources and networking opportunities it affords.
- Focus on profitability. "Many small firms have no trouble getting work, but it does seem to be a problem to perform the work for a reasonable profit," Williams observes. To that end, she is concentrating on cutting expenses, pricing her services correctly and keeping better track of her billable hours.
- Consider specialization. Williams says this is the buzzword at all of the professional functions she attends. Eventually, she would like to have two or three niches, such as the entertainment focus she has already developed. Choosing the right field can be hard, she concedes. "You want to do what's good for the firm but also what the firm will be good at." She believes it makes good business sense to specialize, although small practitioners may find that hard to imagine. "When you're starting out, you hear about a specialty and you don't understand how you can make a business out of it. You're so hungry for business, you think, 'I have to take whoever comes in the door.' Yet as you grow, you gain knowledge in one area and business starts coming because you're an expert."
Firm ProfileName: Angela Williams, CPA.
Year opened: 1993.
Location: : South Orange, New Jersey.
Total personnel: : Two, plus one secretary in tax season.
Number of owners: : One.
Number of CPAs: : One.
Areas of concentration: : Tax, write-up, consulting and personal financial planning.
Percentage of fees in: Accounting: 30%.
Consulting and personal financial planning: 10%.
Types of clients: : Small businesses under $1 million in sales; minority-owned businesses; entertainment clients.
Advertising and marketing programs: : Involvement in professional and community organizations.
Best thing we did in the last five years: : Invested in right technology tools; hired an experienced staff accountant.
Worst thing we did in the last five years: : Took on clients that were too small; hired a staff member with the wrong experience.
How the practice will change in the near future: : Greater emphasis on specialization.