8 reasons mid-size CPA firms should adopt true strategic planning

8 reasons mid-size CPA firms should adopt true strategic planning

I love mid-size CPA firms, those with 10-100 staff. These firms are often rooted deeply in a community or region and usually have grown organically by delivering great service to their clients for many years. Among all of the professionals who advise clients, the CPAs at these firms are often the most trusted advisor. They are salt-of-the-earth people who volunteer their time and serve on boards and just do great things in the community.

These people are stable, rock-solid and trustworthy. And that sometimes leads to a problem. When I first begin working with leaders of these firms, I discover a sensibility that is disturbing. There is this dreamy notion of the future which imagines that what has happened in the past will pretty much be what happens in the future.

The firm will grow by X percent every year. New partners will come into the fold. New clients will be added. New offices will be opened. It will all happen slowly and methodically just like it has in the past – so the dream goes. I’m not convinced of this.

I believe three major drivers will force CPA firms to make tough choices over the next few years. Those choices, and the actions that follow them, will determine the trajectory of the firm – up or down. The three drivers:

  1. Technology disruption from AI and blockchain is eroding the traditional value of tax and audit services. Many people believe computer systems now do most of the work, which drives down the perceived value and profits of tax and audit work.
  2. Entrepreneurs, executives and high-net-worth families need customized advisory services and year-round support and guidance to achieve their financial dreams. The level of complexity they deal with is very high. The CPA, their most trusted advisor, is the obvious fit for this.
  3. Thousands of small first-generation CPA firms who are not prepared with succession plans will flood the market at the same time. This will create unprecedented M&A activity and put talent-in-motion like we’ve never seen.

I believe the successful mid-size CPA firm is in the best position to take advantage of these trends. But most mid-sized CPA firms are not putting true strategic plans in place to realize their full potential. I’d like to provide 8 reasons that I believe mid-size CPA firms should put real strategic plans in place and why these plans are essential.

My thesis is simple: if you don’t have strategic plans, it’s highly unlikely that you’ll achieve your firm’s full potential and far more likely that you’ll miss out on opportunities that will not come around again in your lifetime.




Before we look at the 8 reasons, I’d like to quickly describe what strategic planning actually is because I find that many people struggle with the concept.  Strategic planning, in its simplest form, includes four best-practices:

  1. Document where you are today (current-state) on 7 key vitals (see this post).
  2. Define a vision for where you want to be in five years (future-state) on those vitals.
  3. Build a plan made up of SMART goals (Specific, Measurable, Actionable, Realistic, Time-Bound) for the coming year to bridge the gap between current-state and future-state.
  4. Execute the plan and track progress by way of four meetings over the year.

If you’d like more details about how to do strategic planning, please see my article entitled 4 STRATEGIC PLANNING BEST PRACTICES FOR MID-SIZE CPA FIRMS.

If you like these ideas, you’ll love this Action Guide: 7 STEPS TO DOUBLE SERVICE FIRM REVENUE

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While this might sound a bit formal, especially for mid-size CPA firms that only have a handful of partners, here are 8 reasons I believe you should engage in this process:

  1. Change is hard and it requires focused effort.
  2. It takes a team to cross the chasm from current-state to future-state.
  3. This process creates alignment among different stakeholders.
  4. Life gets in the way.
  5. If you don’t have a plan, you won’t get there.
  6. Reaching your desired future-state takes time and persistence.
  7. Strategic plans hold everyone accountable.
  8. This is way too important to leave to chance.

Let’s look at these for just a moment.

Change is Hard and it Requires Focused Effort

Human beings don’t like change. We resist it. This means that to achieve real meaningful change, you have to be formal about it. You have to set SMART goals and lead by example. You need to put your SMART goals and the owners of those goals out in the open so there is full commitment to achieving them.

One of the things I ask CPA firm leaders to do after our brainstorming session is to identify one area of their work-life where they will commit to making a change. I also ask them to document this and share it with the team. This is very effective at creating buy-in and focused effort.

It Takes a Team to Cross the Chasm from Current-State to Future-State

Over the last 20 years, I have helped numerous firms cross the chasm from where they were to where they wanted to be. Not one time did that happen with just the efforts of me and the managing partner. It took a team effort. The same will be true for your firm.

To cross the chasm from you are now to where you want to be in the future, many people will need to contribute. More than that, it will be discouraging at times and will seem like you’re not making progress. This is where a team-spirit cannot be defeated. When team members encourage, problem-solve and brainstorm with struggling colleagues who are tackling big challenges, that colleague is much more likely to break-through and win. I’ve seen it time and time again.

This Process Creates Alignment Among Different Stakeholders

Does everyone at your firm agree on everything? Not likely. But the process of envisioning future-state and identifying strategic goals that everyone can believe in and commit to – that process produces alignment. You’ll still disagree about how to get there. But where you’re going will be very clear.

Life Gets in the Way

One major reason firms don’t cross the chasm from current to future state is because they get distracted. Between work-life, home-life, a hectic schedule and volunteer activities, there is no time left for focusing on the big goals that will most likely impact the future of their firm.

Strategic planning fixes this. The process includes four meetings over the course of the year where the only focus in those meeting is progress against SMART goals. It’s amazing to me how people find ways to shift things around at work and at home to make sure they meet their strategic plan objectives. They don’t want to be embarrassed in front of their colleagues at the next strategic planning meeting.

If You Don’t Have a Plan, You Won’t Get There

There is an old saying: “if you don’t know where you’re going, any road will get you there.” Far too many mid-size CPA firms get comfortable with a work-a-day mindset that simply goes with the flow. I believe “the flow” will put hundreds, if not thousands, of small to mid-sized CPA firms out of business either through closures or forced M&As because the founders need to retire.

Strategic planning interrupts the flow and allows you to move in a direction of your choosing. It makes the roadmap crystal clear. When SMART goals are out in the open and everyone knows about them, there is no doubt about where you are going or what you plan to achieve.

Reaching Your Desired Future-State Takes Time and Persistence

It has taken the average firm we’ve worked with 6 years to achieve the goal we identified in year one as “must achieve.” Along the way, there have been challenges and moments of doubt, even from managing partners. But persistence pays off in the end.

I draw on an analogy here from championship baseball teams. It takes 2-3 drafts, which only come once a year, to put the right talent on the team. Then it takes a few more years for that talent to mature and learn to play as a team. Then comes the championship. Along the way, there are losing seasons and frustrations. But in the end, that championship ring feels incredible.

Strategic Plans Hold Everyone Accountable

Half-hearted commitments will only get you half-baked results. Because it takes a team to cross this chasm, you need team members who are fully committed to achieving SMART goals. Strategic planning does this better than anything I’ve ever seen. The four annual meetings hold everyone accountable to achieve the goals they’ve elected to own.

This Is Way Too Important to Leave to Chance

You can hope your firm takes advantage of all the opportunities coming your way. But hope is not a business plan. CPA firm leaders who are hoping the right things will happen are leaving their future up to chance. I believe this is way too important to leave to chance.

There are two ways to be successful in business: accidentally or on purpose. Strategic planning empowers you to be successful intentionally, with a specific plan in mind that everyone agrees to and is working together to implement.

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