Originally posted on 6 Jan 2014
There’s one sure way to know what your competitors are doing: Ask them, says Daniel Hood in an article in accountingTODAY this month. You can read the article here.
The subject came up recently when the author was speaking with the chief executive of a Top 100 Firm, and he mentioned that his main competitor in a certain industry space was facing exactly the same issues he was facing. He wondered how he could be so sure.
“I asked him,” he said. “We have lunch once or twice a month.”
The author says that he has noted before in articles he has written as to how generous accountants are with their expertise. It’s a sign of professionalism, an indicator of courtesy – and a crafty survival skill. After all, who is better positioned to show you how to run your firm than someone who’s running their own firm? The fact is that professional services firms are a small subset of the general universe of businesses, and accounting firms are a small subset of professional services firms. While there are a few good guides (and some excellent trade magazines …), the people who really have the key to success are your competitors.
So one of the best things you can do for your firm is to get to know the people running other firms. Meet them for lunch or coffee, join them at MAP meetings at your state society, network with them at conferences and industry events. Pick their brains – and let them pick yours. And don’t be afraid of large groups of competitors: The more you can get in touch with, the more likely it is that one of them will have solved whatever problems you’re struggling with.
More advice from Daniel Hood:
- While meeting with your counterparts at competing firms is a great way to improve your own firm, there are other ways to learn from and about them. For starters, seek out benchmarking data on firms of your size in your region – it’s out there, and not that difficult to find. With that in hand, you can compare your firm not just to itself, but to the firms you’re competing with.
- More specifically, take a look at their Web site. The temptation here is to assume that this will only tell you about the state of the marketing efforts. And it’s true that it will, first and foremost, let you know if you need to bump up the sophistication of your site and the content on it – but that’s not all it will do. It should also tell you what services they offer, and may tell you which ones they’ve added recently. It will tell you how many partners and offices they have, and often indicates how many overall staff they employ. For larger firms, it will likely give you an idea of how much they’ve been hiring recently. And it may tell you where their experts are publishing articles or speaking to client groups.
- You can’t know enough about the firms around you. The more you know about their successful strategies, the more you’ll want to adopt them yourself. The more you know about their clients, the better you’ll be able to serve your own (and maybe some of theirs, too …). The more you know about their staff, the better you’ll be able to treat yours (and, again, maybe some of theirs). And in these days of rampant mergers and acquisitions, the more you know about their firm, the more you may want it to be part of yours.
Benchmarking Best Practices
A white paper has just been published on benchmarking by Sageworks. Accountants can download a free whitepaper explaining how to use financial benchmarks with business clients and the pitfalls to avoid when showing a business how it compares to its industry. Download is available here.
The white paper says: “If a horse is running a race by itself, it will win every time. And we all like receiving the big trophy. Unfortunately, though, commerce is anything but a single -horse race, and even a personal -best doesn’t necessarily secure the trophy or land a new client. In each market, there are many other horses or competitors, and globalization will only increase competition in future races.”
Accountants can use the comparisons in this white paper to highlight potential areas for improvement or to show areas where a company outperforms the industry.