Changing the Business Model from Compliance to Consulting
The ever-changing business environment brings forth new technologies and consumer demands, forcing firms to shift their offerings to meet both the spoken and unspoken needs of their clientele. Firms must take a comprehensive look at how their clients are doing business, while also assessing the challenges they face in order to gain a deep understanding of the services they may require.
As such, firms have begun to look at their business models from a different angle, shifting their mindset from only compliance services to a more consulting-minded approach. Gone are the days of simply doing regulatory compliance work consisting solely of audits and taxes. What once began as technology, such as AI and cybersecurity consulting offerings, has shifted into something that spans across a wider range of aspects within the overarching business environment.
In today’s atmosphere, firms are adding consulting-style services to their offering lists, including exit planning services, supply chain consulting, HR services, and even sustainability consulting services. Let’s take a look at each of these service offerings and how they are shifting the way firms approach their clientele.
Exit Planning Services
Exit planning services serve as a precursor to traditional merger and acquisition services and are a different form of transition services. These services provide a way for firms to get a client on retainer, specifically on retainer under a different fee structure than typical service offerings. This, in turn, brings more money into the firm through this new stream of revenue.
Bringing these clients into the firm establishes a relationship, which is important because it creates a natural funnel of opportunities down the line. With this relationship, trust is built, and a mutual understanding of how things work and what services are needed can occur. This is also part of the funnel for additional services in the future, such as merger and acquisition services, which is important for the firm.
Supply Chain Services
Another form of consulting service being added into existing practices is supply chain consulting. This type of consulting service helps companies look at their supply chain at a deeper level, beyond the numbers. This deep dive into the supply chain process is about making the most of all moving parts in the process by helping firms create high-performing, resilient supply chains that drive profitable, sustainable growth, even in the face of change.
Services can include strategy, optimization, and risk management among other options, all with the common aim of helping the supply chain minimize negative impacts of disruptions on revenues, costs, and customers.
A number of small to mid-size firms have begun offering human resources services as part of the consulting services offering. Depending on a company’s size, having a full- or part-time HR manager is almost impossible, and the burden falls on the office manager or CEO to handle employee issues, policies, and compliance standards. HR consulting services are a way to outsource these responsibilities to ensure compliance with state, federal, and local regulations is upheld. Service offerings can include creating employee handbooks, developing policies, HR audits and organization, training services, form development, outsourcing, and much more billed on a retainer basis.
These services provide a way for people within an organization who have been on the internal operations side to become outward facing to clients. This shift from inward facing to outward facing brings a whole new set of chargeable services to the firm’s offerings, which in turn brings more income through the door. Additionally, the firm’s clientele can be assured they are receiving the benefits of a knowledgeable and experienced HR executive who plays a hands-on role in resolving issues and keeping things in order. This is a win-win situation for both parties.
Firms, specifically larger firms, have begun to offer sustainability consulting in an effort to mitigate climate change and to drive rapid decarbonization and reduce waste across production systems. These services are a way for business leaders to embrace risk management while also adapting to current environmental needs in order to make sure their firm is prepared for the future.
Areas of service include opportunities for improvement, reduction of risks, transformation of operations and supply chains, and reallocating and raising capital to develop programs that are aimed at sustainability.
Each of these items helps drive transformation within an organization to make it more sustainable. This is a hot-button topic in today’s world and demonstrates how firms are leaning toward service offerings that differ from those they have offered in the past.
Future-Proofing Your Firm
From the above examples, it is evident that there has been a shift in the service offerings of firms in the recent past. Gone are the days of solely completing audits and doing taxes. There is now a large demand for consulting that serves as a new revenue stream, which can help a firm expand its practice.
If you are ready to take your firm from compliance to consulting, it is important to understand what services your firm excels at and expand on those. Crowdsourcing from within your firm on how and where to innovate is a first step toward deciding what service offerings to add to your existing list. If there is a member of your firm who is passionate about something and thinks they can turn it into a profitable aspect of your business, explore the options and run with the opportunity.
Additionally, it is vital to check in with your clients to understand where they are at and where they are struggling in order to know what services you can offer them to provide assistance in those problem areas. Ask clients how they are doing, what they are struggling with from a business perspective, and how you can help. Gaining this insight will help you take the information and turn it into a successful line of business for your firm. Clients are eagerly looking for transformation and are striving to be ready for the future, especially after the trials and tribulations 2020 has thrown everyone’s way. By exploring these areas, you can provide assistance to your clients with non-traditional service lines, while also working toward future-proofing your firm, which in turn helps your clients do the same. Becoming more consulting-focused and shifting away from solely traditional service offerings will provide you with a natural funnel of opportunities that future-proof your firm and your clients.
About Christine Hollinden
Christine M. Hollinden, CPSM, founder and principal of Hollinden | marketers + strategists, is passionate about helping professional services firms distinguish themselves from the pack. Her forward-thinking approach has earned her industry recognition as evidenced by the firm’s nationwide client base. Her competitive spirit has helped hundreds of firms build brands, create niche practices, and expand their practices. In her spare time, you will find Christine playing golf, cooking a gourmet dinner for friends, or leading the Houston Chapter of Chaîne des Rôtisseurs, the oldest wine and food society in the world.
Welcome to CPA Growth Trends — your source for information, insights, tools and best practices to drive growth within an accounting firm.
with Danielle Reynolds, Business Development, Manager with Whitley Penn
A business developer’s day involves a myriad of activities from external meetings with business owners and referral partners to scoping calls for initial client connections.