Seven Steps to Success

A multi-faceted approach can help firms meet client needs.

  • KANSAS SOLE PRACTITIONER DeAnn Hill has succeeded by sticking to her small business niche. However, these companies are interested in far more than basic traditional services.

  • TO AVOID BECOMING COMPLACENT about her client base or about her clients capabilities, Hill has begun to investigate online opportunities for her firm and her clients so she will be able to offer the services they need when theyre ready for them.

  • DROPPING HER AUDIT PRACTICE actually helped Hill to raise fees because some of her clients have grown significantly in the last few years and the firm has had the time and resources available to offer more sophisticated services to suit their expanded needs.

  • TO ENHANCE EMPLOYEE MORALE, the firm closes on summer Friday afternoons. Clients often are out of the office themselves, and employees are invigorated on Friday mornings and grateful for the time off.

ANITA DENNIS is a Journal contributing editor.

DeAnn Hills four-person firm is located in a Kansas town of 5,000 peopleBaxter Springswhich is the biggest city in a county with only two CPAs. Hills clients, mostly closely held family corporations or mom-and-pop sole proprietorships, represent many different industries, and she performs mainly traditional servicescompilations, reviews and payroll; reconciling state tax incentives; and job investment credits for business expansions. By following seven simple steps, Hill has been able to integrate progressive approaches into her practice so she can continue to offer quality services to her niche. Her method illustrates a way to combine time-honored practices with up-to-the-minute approaches to meeting client needs.

Problem: Meet the increasingly sophisticated needs of small clients.
Solution: Keep up with technology; focus on your strengths; use the personal touch with employees and clients.

To create a successful practice, Hill has branched out onto the Web, but she has also remained sensitive to her clients and staffs more basic concerns.

1. Dont underestimate small clients technology needs. Hill does not want to become complacent about her client base or about her clients capabilities, so she has begun to investigate online opportunities for her firm and her clients. She has learned about Web page development and taken a CPA WebTrust seminarthe first step to becoming qualified to offer CPA WebTrust, the seal offering assurance to consumers about online transactions that is available only from specially licensed CPAs. Even among her smaller clients, many have Web sites they use to offer potential customers information or product samples, but some are interested in online retail and wholesale transactions, and Hill believes the CPA WebTrust service will be in demand when they reach that stage. My clients and I are both in the education stage, she says, but she wants to continue building her knowledge so she can meet clients increasingly complicated needs.

Moving online to create Web pages or offer the CPA WebTrust seal could mean branching out beyond her immediate community, but Hill believes this will work in her niche. Family-owned and small companies often like to conduct much of their business with someone from out of town because they dont want neighbors knowing their business. For this reason, Hill tries to focus her recruitment efforts on out-of-towners. If I hire the local attorneys spouse, the attorney may represent my clients top competitor. She relies on local universities and word of mouth to help in the hiring process.

Firm Profile

Name: DeAnn M. Auman Hill.
Year opened: 1985.
Location: Baxter Springs, Kansas.
Total personnel: Four.
Number of partners: One.
Number of CPAs: One.
Areas of concentration: Traditional services and MCS.
Percentage of fees in Accounting: 36%.
Auditing: 4%.
Tax: 30%.
Consulting and PFP: 30%.
Types of clients: Machine shops, manufacturing, retail.
Advertising and marketing programs: Referral.
Best thing we did in the last five years: Discontinue government and not-for-profit audits.
How the practice will change in the near future: Exploit opportunities on the Web; install a Windows NT network (the firm now has six standalone systems); explore elder care and CPA WebTrust assurance services.

2. Dare to downsize. At one point, the firm performed government and not-for-profit audits, but Hill decided she was spreading her resources too thin, so she stopped providing these services, letting go of one CPA staff member in the process. Ironically, weve seen our fees rise as a result, she says. In a small firm, timing is everything, and during the five years since her downsizing, some of Hills clients have doubled sales to as much as $4 million a month because of a strong economy. And when those clients needed more complicated consulting services, we had the time and resources to devote to them. For clients that once needed only traditional services, the firm now also does studies of internal policies and procedures, helps them analyze production and budgeting or performs time management studies. We help them grasp information they have lost touch with as their companies have grown. The information is easily available, but the clients dont have the time or the knowledge to find it or analyze it. They dont have time to figure out what the numbers mean.

Clients arent always aware of what services they need or what Hills firm can do for them. If we see a clients internal controls are found to be insufficient in the course of a compilation or bank reconciliation, we talk to the client about how we can help. Because the firm also does PFP and estate work, we get to know our clients very well. We dont often lose clients because we are so close to them. The firm and the clients both started out small and grew up together, forming a strong bond.

3. Consider employee needs. When Hill began her career, she worked for both a sole proprietor and for a 25-person firm. I sometimes saw people making terrible decisions about their staffs that really harmed employee morale, such as refusing to let them leave for a personal emergency or to take any time off during tax season, she remembers.

In an effort to learn from those mistakes, Hill has instituted a number of employee-friendly policies, such as closing the firm on summer Friday afternoons. We started two years ago doing this from July 4 through Labor Day. The clients accepted it completely; they typically arent in on summer Friday afternoons anyway. Firm members were happy to stay some afternoons if they were needed. Ive never seen so much energy here on Friday mornings. Staff members will come in early if they have a lot of work. Last year, Hill extended the policy from Memorial Day to Labor Day.

To give herself a break, she takes a five-day vacation during her kids spring vacation in March. I started to do it a few years ago at a friends suggestion and now I do it religiously. I cant believe the vim and vigor I have during the last few weeks of tax season, which is the busiest part.

4. Keep staff in the know. All your personnel should know something about every client so they are informed when you are out of the office. I review with my staff where the work stands so clients can get an answer when they need it and dont have to play phone tag with me. If a client calls with information or a question, I expect staff to know the follow-up questions to ask.

5. Use the personal touch in practice development. The firm gets most new clients by referral, generally from bankers and attorneys. We tried seminars and newspaper ads, Hill reports, but we get better quality clients through efforts in which we get personally involved, such as sponsoring school events and joining the chamber of commerce.

6. Develop a new client acceptance list. Hills list, which questions how often prospective clients have changed accountants and attempts to ascertain whether they take responsibility for their own financial positions, helps us learn about client integrity but also about how easy the person would be to work with. Such information can shield her from unprofitable relationships before they begin.

7. Show your face. Hill believes its particularly important for sole practitioners to be active in their local and professional communities. You have to build up your professional network so you have people to bounce ideas off. If you do get the opportunity to take on a big client, you have people you can rely on for expertise or time.

Hill believes her smartest choice was to focus on her small company niche in the first few years of the firm, the time when its most tempting to take on as many clients as possible. Before CPAs accept clients that may be too big for them, she suggests they determine whether their firms have the staff resources to handle such assignments. If you cant find someone in your firm who is competent to do the work, rememberyoull have to do it yourself. So I always ask myself, Do I have that much time in my schedule?

While its a good idea to focus on a particular market, its always crucial to understand new developments in that market, such as small businessess need for online services. That means keeping current on technology and other areas of interest to clients. If you cant be on the cutting edge, Hill advises, be in the top 25%.


Keeping you informed and prepared amid the coronavirus crisis

We’re gathering the latest news stories along with relevant columns, tips, podcasts, and videos on this page, along with curated items from our archives to help with uncertainty and disruption.


Building process maps: Template and instructions

Documenting your financial close process and finding opportunities for automation are more important than ever. Our customizable slide deck has instructions, a risk assessment questionnaire, and bonus checklists that will help you map out your process.