High Growth Professional Services Firms
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description
Hinge, Inc. discusses research findings on increasing valuation and growth for professional services firms.
Transcript of High Growth Professional Services Firms
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o What makes a firm grow fast
o Why do customers buy
What We’ll Cover
o What makes a firm valuable✔
✔
✔
o How can you make it happen✔
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COMMANDING A PREMIUM VALUATION
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Top Dollar
22XEARNINGS
2-3XCOMPARIBLES
10XREVENUE
15XEBITA
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What Buyers Buy
THE EXPECTATION OFFUTURE REVENUE
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40 Factors
› Financial
› Employees
› Brand/Marketing
› Clients
› Management Team
› Technology
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Valuation Driver 5
QUALITY OFMANAGEMENTTEAM
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Valuation Driver 4
QUALITY OF EARNINGS
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Valuation Driver 3
EXISTING CLIENTCONTRACTS
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Valuation Driver 2
PROJECTED GROWTH RATE
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Valuation Driver 1
STRENGTH OF EXISTING CLIENT RELATIONSHIPS
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ACHIEVING HIGH GROWTH
Marketing Spending and Growth
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Revenue Growth
2007 2008
Marketing Spending
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Marketing Positioning
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Business Development Priorities
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Marketing Initiative Priorities
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Referral Business
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The Elevator Pitch (% Acceptable)
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The Elevator Pitch
What Do We Do?a) IT consulting
b) Consulting engineers
c) CPA firm
d) Graphic Design
Our mission is to provide the highest level of quality and to maintain a tradition of technical excellence, commitment to quality and client satisfaction on any project the firm takes on. We strive to apply high professional, ethical and aesthetic standards.
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UNDERSTANDING YOUR CLIENTS
Identifying the Competition
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18 166
Competitors identified by clients
Competitors identified
by firm
How to Improve Marketing
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Approach Percentage
Personalized understanding of my situation 19.9%
No high pressure sales calls 13.5%
Share relevant case studies 12.2%
Present detailed solution 10.9%
Meet with me personally 9.0%
Show that you want our business 6.4%
Follow our structured process 4.5%
All other marketing 21.8%
Most Meaningful Selection Criteria
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Criteria Percentage
Expertise/Technical skills 19.8%
The project team 18.1%
Firm experience 14.9%
Knowledge of my industry/Situation 12.5%
Reputation 11.1%
Firm size and reach 5.6%
Availability/Flexibility 5.6%
Personal relationship 4.5%
Price 4.2%
Firm management approach 3.1%
Firm resources 0.7%
What Were You Trying to Avoid?
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Concern Percentage
Poor results 47.9%
Project team problems 38.7%
High fees/Cost overrun 10.9%
Wrong size firm 9.2%
What Do Buyers Want?
› Can you fix my problem?
› Will you make my life easier?
› Do I enjoy you as a person?
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Aware of services offered by current firm?
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Yes
No
36.3%
63.7%
Desired Services from Existing Firm
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None
One or morenew services
32%
68%
Desired services already offered
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Notoffered
Already offered
14.6%
85.4%
Offering New Services
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Approach Percentage
Senior person makes personal visit and discusses business situation and makes recommendations
45.4%
Senior person makes personal call and discusses business situation and makes recommendation
15.9%
Senior person sends personal email and discusses business situation and makes recommendations
13.6%
Follow our structured process 4.5%
All other marketinge.g. Direct mail, newsletters, website, trade show
20.4%
Reasons for Loyalty
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Reason Percentage
Why Yes?
They delivered on their promise 67.4%
Have become a trusted partner 18.6%
Contract length 14.0%
Why No?No ongoing need/end of contract 60.0%
They did not deliver 40.0%
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BUILDING YOUR FIRM
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Your Growth Engine
› Profitable Clients
› That Remain Loyal
› And Refer Others
Building Your Firm
› A Competitive Strategy
› The Right People
› Delivering What You Promise
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Top Challenges
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