Leveraging Alliances, Associations and Partnerships to Grow Your Firm
When considering ways to grow a CPA firm, one option is to join an alliance, association or partnership. These types of organizations can be significantly helpful to firms that are looking to enhance the following aspects of their business: education, niche growth, risk mitigation, business development, operations, best practices and expanding their geographic footprint. Every firm is different, and there are significant differences in the types of alliance, associations or partnerships to choose from. It is important to compare apples to apples and identify the firm’s must haves before joining in blindly.
There are approximately 50 accounting firm alliance organizations to choose from nationally. Alliances are typically formed from existing firms that have developed niche specialties. These firms have significant and intelligent bench strength ready and willing to provide technical support to the alliance’s member firms. The ability to share technical information can result in reduced time spent on challenging client issues, which therefore creates better billing situations.
The operational services that an alliance can provide range anywhere from marketing and sales support to human resources, operations and education support. Many provide group CPE and networking opportunities where best practices can result from leadership-led conversations. Alliances have their own internal support team, and many have evolved to incorporate external networks that support the growth of their alliance firms via discounted or group rate services. Additionally, almost all alliance firms provide support to member firms by giving access to international firm capabilities. Not all accounting firms have clients that have expanded globally, but for those that have, it is a slam dunk to participate with an alliance organization.
Fees for these types of organizations range from $2,000 per year to $100,000 per year, most often based upon the annual revenue of commercial accounting at the firm. The baseline annual fee may or may not include travel, additional CPE or special consultation. Furthermore, some alliance firms require geographic exclusivity which ultimately helps maintain competitive advantage. Associations
Associations are more specific to specialty or geography. For example, a firm that has a construction specialty may consider participating in the more than 10 organizations that meet regularly each month. Associations like these can provide a forum to grow your firm’s niche by providing a platform for shared information, networking, and marketing or promotion of your firm. Becoming a member of an association means that you will attend regular events and likely, over time, get to know the members and vendors, providing future opportunity. A firm may be one of a group of firms that regularly attends networking events at associations, but firms that want to go the extra mile can participate in group panels or presentations or leverages a board opportunity.
Geography-based associations take into consideration locality. From northern, central and southern New Jersey to county associations and even town associations, these associations provide no exclusivity outside of perhaps imaginary boundary lines or parkway exit number. You will learn at geographic-based associations that the focus is more about business taking place in that location rather than about sharing knowledge amongst businesses. It is more of a top down approach in disseminating information versus sharing amongst participants. Associations charge fees based upon a variety of different measures, sometimes it is based upon number of employees, or number of offices or is a membership level which gives the business built-in advertising leverage.
Partnerships are personal. Developing relationships with a partner firm or a strategic referral partner can elevate your firm as a part of a bigger-picture plan. Take a medical device company with a large accounting department that has an established partnership with a payroll company and a human resource facilitator. These partners may also focus on developing business with the same target market as the medical device company. This type of partnership is between different types of organizations, yet the commonality of a same-type end buyer/user is there. Partnerships are formed out of necessity or dedicated thought to strategic company growth. There is rarely an upfront cost to the partnership, however partners usually discount one another’s services to benefit the advancement of growth. Some alliances and associations have strategic partnerships. These types of partners are helpful to association members when they can expand upon existing services. Accessing partners via a membership to an association you trust and know can bring members closer to getting quality services than if they were to research and purchase on their own.
While there is no true one-size-fits-all when it comes to joining an alliance, association or partnership, it is likely that most organizations are interfacing with all three at different stages of growth. Some relationships last many years with membership and others seem to fade out as companies and firms go through normal growth cycles. A best practice would be to evaluate all the places the company spends time and check in on the return on investment periodically.