The Magic of Marketing
I see many different approaches to marketing in the many accounting firms I work with, some fantastic, some good, and some not so good.
For example, there's a sole practitioner I know who advertises on TV for delinquent tax payers to come clean and report prior years unreported income. His phone rings off the hook, and it's only a local cable channel he uses.
Another has such a powerful web site that it draws over $100,000 worth of new work in every year.
One firm has given the full time job of marketing to their most productive partner. Are they crazy? Apparently not, as he speaks constantly at business meetings, bank presentations, seminars and many other events and brings a ton of new work into the firm every year.
Other firms I have seen spend a small fortune on a glossy brochure and done nothing with it - there's hundreds of them piled up in a stationery cupboard in their office. (And they seem quite proud about it!)
Many accounting firms still don't have a clue when it comes to using Facebook, Twitter, YouTube and all the other amazing tools at our disposal these days.
It drives me crazy sometimes!
I hate to see waste, and I see so many firms trying to attract new business in all the wrong ways that I could pull my hair out!
Anyway, in this article I wanted to give you an idea or two that could be easily implemented and cost virtually nothing to do!
Proof positive being that I do this myself for my own business, and it works!
Here's the concept - you probably have a video camera that you bought to film your first-born's first steps, family vacations and so on, right?
And you have internet access?
If you said yes to those two questions, you're in the video production business and you need to get a YouTube account.
That's all you need.
Now, think about a few simple tax saving tips that you could talk to camera about and record yourself talking about them.
Set up the camera on a tripod facing you, and chat away to the camera. You might feel a little self-conscious about this, but when you overcome that it'll feel quite natural.
Film about 30 minutes of tips, and then edit the footage down to less than ten minutes total and upload it to YouTube, and hey-presto, you have a marketing video.
Providing your content is good, you might be surprised when you see how many people view your little home-made video.
Now, the next thing to do is to embed the video into your own firm's website and even more people will see it.
This is a great tool to have for potential new clients to see before they decide which accounting firm they are going to call.
Have a look on YouTube - there's still very few accounting firms who are doing this, and being one of the first will give you a distinct advantage!
So that’s the first idea covered, but what is it about marketing that is so hit and miss?
Well, the secret, I believe, lies in the planning.
If you're about to start thinking about a little marketing activity in the coming months, the trick is to start with the end in mind.
Ask yourself some straight forward, but often avoided, questions:
· What do you want your marketing to achieve?
· Who are your ideal clients?
· Where do they 'hang-out'?
· What is the least expensive way to get in front of them?
· What are you prepared to do to about it?
· What goals are you going to set?
· What would you need to achieve to consider your marketing a success?
You see, the trouble is, most firms simply spend money on a marketing activity without any planning or much thought. Few set a marketing budget and allocate it to various activities throughout the year, and most fail to measure what works and what doesn't.
Many accounting professionals have tried one or two activities, had little or no success, and decided that marketing doesn't work.
Nothing could be farther from the truth – try my YouTube experiment mentioned above and see for yourself.
Well executed marketing doesn't have to be expensive. Let me give you another example.
Let's imagine that one of your goals for next year is to build a new niche market. Let's say that in addition to your regular clients, you want to build a reputation as an expert in dealing with construction companies.
So what do you do?
Google 'Construction company trade associations in Toronto' for example, if you are in Toronto, and you'll find many trade associations, trade shows and other useful sites to visit.
Many of these organizations will have a newsletter and a web site - and they need content. Some will also have annual conferences - and thus they need speakers.
See where I'm going with this?
None of these activities (providing content for newsletters and web sites or speaking at seminars) costs you anything to do! Yet many firms might first think of buying a mailing list and sending a mass mailing out to thousands of 'prospects', or producing another glossy brochure focusing on their chosen industry to mail out to people who might not be interested in what you have to sell.
However, readers of their trade newsletter or web pages, or attendees at trade seminars and conventions might well be interested in what you have to say – on their own trade association website or in their trade newsletter!
Marketing doesn’t have to be expensive – in fact, most of the best marketing I have seen can be done for free!
Thursday, May 6, 2010
Wednesday, March 31, 2010
It’s on my desk... somewhere!
One of the books that has had a profound effect on me is ‘The E-Myth’ by Michael Gerber.
Aside from Jim Collins’ ‘Good To Great’ it has to be the book that has had the most impact on me.
And yet, I realized recently, I have fallen into one of the most popular traps encountered by those who should know better, I`ve failed to implement a whole load of the theories and practical ideas that the book preaches.
It dawned on me the other day, when discussing with Salima, my wife (a Lawyer and entrepreneur, and a dedicated list-maker) some issues we were both interested in, I said, I have the answer to that – it`s on my desk... somewhere!
Yes, I have to be the first to admit that – if left to my own devices – I am a terrible procrastinator and don`t keep `to-do` lists like I know deep down that I should. My desk is covered in papers, all useful, that I mean to get around to organizing or implementing sometime, but because I have not organized them into tasks on a list, they sit there, uncomplaining, waiting attention.
In contrast, Salima has a book that she keeps her lists in and she dutifully crosses off each task when done. You don`t need to flip back many pages to find all the items neatly crossed off! Also, she has created her own knowledge management system in her media business that all of her staff can access online, anywhere in the world, any time of day.
So, I decided to set aside the procrastinating half of me, and let the action-based Steve take control.
It`s all well and good having a `to-do` list if you`re the only one having to do the items listed, but if your staff will have to do some of the action points, then it really needs to be online somehow.
As the idea grew, I decided to investigate what is more commonly known as a `knowledge management` system.
To my relief, I found a couple of workable options.
One, is a free `drop box` service, which is basically a web based filing cabinet that one can give access to staff to, for example, and store all the required information virtually.
The only drawback is that it has a relatively low storage limit before it becomes a paid-for service.
The other I discovered, is offered by a well known and trusted Canadian software vendor, who provide a more extensive service to capture all the vital knowledge we professionals store in our heads about our clients which we really should share with our team, but we just don`t know how or where to store it!
The impact a good knowledge management centre will have on a firm is accentuated when one considers how much knowledge a typical partner carries in his or her head about their clients.
Much of it never makes it to the file, simple, but important, stuff like, the client`s proper name is Ferdinand, but never call him that, he goes by `Ferdie`.
Add to that the fact that by the year 2020 some 75% of today`s partners plan to have retired, and you have just a ten year window to document and share this important information.
If you`re looking to sell your interest in the firm in the next ten years, having a parking space for this information will make your firm a little more attractive to potential buyers, who will have the comfort of knowing all vital client information has a home, and that they can access it easily.
Another survey stated that staff at your firm spend between 15% and 35% of their time just searching for information, and a staggering 40% of the time they never find what they`re looking for. What a waste of precious resources!
So, based on the above, I believe that having your very own `Wikipedia` now seems to make financial as well as practical sense.
Let`s look at just a few practical applications –
1. Manage your recruiting and human resources functions more effectively by having job descriptions, submitted resumes and performance review notes and more, all readily available, and subjected to security levels so sensitive information is only available to those who should have access to it.
2. Gather all of your best practices for auditing various types of organizations in one place so your team is primed before they start any particular new assignment, instead of learning on the job – something clients see and hate paying for!
3. Collect all your best tax thinking in one place and have templates ready to run, stop re-inventing the wheel each time a difficult tax problem presents itself!
4. I could go on, but you get the idea by now, right?
So, that`s what I am starting to develop myself – new internal systems to improve client service and an internal knowledge management system to store that information for all to benefit from.
I would urge you to follow suit and explore the options available. This seems to me to be an investment that has an immediate and tangible payback, and we don`t stumble across those every day!
Aside from Jim Collins’ ‘Good To Great’ it has to be the book that has had the most impact on me.
And yet, I realized recently, I have fallen into one of the most popular traps encountered by those who should know better, I`ve failed to implement a whole load of the theories and practical ideas that the book preaches.
It dawned on me the other day, when discussing with Salima, my wife (a Lawyer and entrepreneur, and a dedicated list-maker) some issues we were both interested in, I said, I have the answer to that – it`s on my desk... somewhere!
Yes, I have to be the first to admit that – if left to my own devices – I am a terrible procrastinator and don`t keep `to-do` lists like I know deep down that I should. My desk is covered in papers, all useful, that I mean to get around to organizing or implementing sometime, but because I have not organized them into tasks on a list, they sit there, uncomplaining, waiting attention.
In contrast, Salima has a book that she keeps her lists in and she dutifully crosses off each task when done. You don`t need to flip back many pages to find all the items neatly crossed off! Also, she has created her own knowledge management system in her media business that all of her staff can access online, anywhere in the world, any time of day.
So, I decided to set aside the procrastinating half of me, and let the action-based Steve take control.
It`s all well and good having a `to-do` list if you`re the only one having to do the items listed, but if your staff will have to do some of the action points, then it really needs to be online somehow.
As the idea grew, I decided to investigate what is more commonly known as a `knowledge management` system.
To my relief, I found a couple of workable options.
One, is a free `drop box` service, which is basically a web based filing cabinet that one can give access to staff to, for example, and store all the required information virtually.
The only drawback is that it has a relatively low storage limit before it becomes a paid-for service.
The other I discovered, is offered by a well known and trusted Canadian software vendor, who provide a more extensive service to capture all the vital knowledge we professionals store in our heads about our clients which we really should share with our team, but we just don`t know how or where to store it!
The impact a good knowledge management centre will have on a firm is accentuated when one considers how much knowledge a typical partner carries in his or her head about their clients.
Much of it never makes it to the file, simple, but important, stuff like, the client`s proper name is Ferdinand, but never call him that, he goes by `Ferdie`.
Add to that the fact that by the year 2020 some 75% of today`s partners plan to have retired, and you have just a ten year window to document and share this important information.
If you`re looking to sell your interest in the firm in the next ten years, having a parking space for this information will make your firm a little more attractive to potential buyers, who will have the comfort of knowing all vital client information has a home, and that they can access it easily.
Another survey stated that staff at your firm spend between 15% and 35% of their time just searching for information, and a staggering 40% of the time they never find what they`re looking for. What a waste of precious resources!
So, based on the above, I believe that having your very own `Wikipedia` now seems to make financial as well as practical sense.
Let`s look at just a few practical applications –
1. Manage your recruiting and human resources functions more effectively by having job descriptions, submitted resumes and performance review notes and more, all readily available, and subjected to security levels so sensitive information is only available to those who should have access to it.
2. Gather all of your best practices for auditing various types of organizations in one place so your team is primed before they start any particular new assignment, instead of learning on the job – something clients see and hate paying for!
3. Collect all your best tax thinking in one place and have templates ready to run, stop re-inventing the wheel each time a difficult tax problem presents itself!
4. I could go on, but you get the idea by now, right?
So, that`s what I am starting to develop myself – new internal systems to improve client service and an internal knowledge management system to store that information for all to benefit from.
I would urge you to follow suit and explore the options available. This seems to me to be an investment that has an immediate and tangible payback, and we don`t stumble across those every day!
Tuesday, March 16, 2010
Does Hi-Tech Offer A Competitive Advantage, Or Is It All Smoke & Mirrors?
That was a question I was asked to comment on at a recent Partner Retreat.
The firm in question was reviewing it's own IT and software issues and decided to ask me, from what I have seen in recent years at firms I have consulted with, how this firm stood as far as it's 'up-to-date-ness' and what an investment of $x should be expected to yield in new revenues or cost savings.
'Well' I said 'It all depends on your point of view and what you want to achieve' I then went on to ask them about their objectives, their budget, the type of services involved and so on until I had a clear view of what they were really asking me.It turns out, they were struggling with two things, and each one hit home to me just how much software has changed what we do and how we do it, and what a competitive advantage there is to be had for those with vision.
First of all, the client was asking me about auto-flow. Had I seen it working? Was it as good as it sounded? How accurate was it? and so on - the questions were flying!
Could a tax return really be completed, accurately, without having to input a single number?
So, I sat them down and told them the truth... the best system I had seen was about 85% accurate, so we're not yet at the stage where we can train monkeys to do this - but we are getting there!
There will always be a certain level of human input in the preparation or review of tax returns, but autoflow is taking us a giant leap away from the number of hours previously required to complete a tax return.
So, if you are prepared to accept that 15% of your returns need adjustments, autoflow is the way to go. The alternative is to enter 100% of the data into all client tax returns. Which would you rather have?
Based on this, they agreed that an 85% time saving, less the time involved in scanning, could be a substantial saving for them. They took a conservative view, and agreed that the receptionist and other administrative staff could easily be trained on how to scan T-Slips and so on, and after taking the time costs of staff, the assessed a 65% to 70% time saving (in real dollars) could be achieved.
Using that, they decided to move forward with that investment as a priority. It really was a no-brainer.
But more was yet to come.
Next, they wanted to know more about a 'what-if' analysis tool they had read about in my column for 'The Bottom Line' and seen demonstrated on a roadshow.
This tool took the client's data and allowed the practitioner to perform all manner of 'what-if' type scenario setting. You could set a target of $500,000 additional profit, and the software will work out for you how many extra units the client needs to sell, or by how much to increase prices to get to the goal, and many other options - like what costs would have to be cut - and so on.
Then it's down to the practitioner, using their knowledge of the client and their professional skill and judgment, to offer comments and modifications to the software suggested options and to make a blend of small adjustments here and there to arrive at the required outcome.
Now, the practitioner can sit down and say something like, 'well, if you can increase your prices by 1.3%, reduce costs by 0.75%, and increase volume by 2.1%, the effect of these combined criteria will produce an additional $499,876 in profit next year.'
In my previous life as a practitioner myself, I would have spent hours and hours on excel spreadsheets trying to fathom out these answers, but with the tools available today, they can be calculated in a nano-second!
Boy, how things have changed.
For the forward-thinking practitioner these two tools can make a tremendous difference to the type of work they do, the revenues they can generate and the satisfaction they can deliver to their clients.
Just imagine if every client had the ability to see the financial impact of any business decision BEFORE they actually made that decision?
Don't you think you'd have better clients a s a result? And what impact would that have on your own professional and financial satisfaction?
So yes, I answered, I do believe that being Hi-Tech offers a real opportunity to differentiate the firm, make more money and enjoy your work a little more than you did before, and it's definately not a smoke and mirrors job!
The firm in question was reviewing it's own IT and software issues and decided to ask me, from what I have seen in recent years at firms I have consulted with, how this firm stood as far as it's 'up-to-date-ness' and what an investment of $x should be expected to yield in new revenues or cost savings.
'Well' I said 'It all depends on your point of view and what you want to achieve' I then went on to ask them about their objectives, their budget, the type of services involved and so on until I had a clear view of what they were really asking me.It turns out, they were struggling with two things, and each one hit home to me just how much software has changed what we do and how we do it, and what a competitive advantage there is to be had for those with vision.
First of all, the client was asking me about auto-flow. Had I seen it working? Was it as good as it sounded? How accurate was it? and so on - the questions were flying!
Could a tax return really be completed, accurately, without having to input a single number?
So, I sat them down and told them the truth... the best system I had seen was about 85% accurate, so we're not yet at the stage where we can train monkeys to do this - but we are getting there!
There will always be a certain level of human input in the preparation or review of tax returns, but autoflow is taking us a giant leap away from the number of hours previously required to complete a tax return.
So, if you are prepared to accept that 15% of your returns need adjustments, autoflow is the way to go. The alternative is to enter 100% of the data into all client tax returns. Which would you rather have?
Based on this, they agreed that an 85% time saving, less the time involved in scanning, could be a substantial saving for them. They took a conservative view, and agreed that the receptionist and other administrative staff could easily be trained on how to scan T-Slips and so on, and after taking the time costs of staff, the assessed a 65% to 70% time saving (in real dollars) could be achieved.
Using that, they decided to move forward with that investment as a priority. It really was a no-brainer.
But more was yet to come.
Next, they wanted to know more about a 'what-if' analysis tool they had read about in my column for 'The Bottom Line' and seen demonstrated on a roadshow.
This tool took the client's data and allowed the practitioner to perform all manner of 'what-if' type scenario setting. You could set a target of $500,000 additional profit, and the software will work out for you how many extra units the client needs to sell, or by how much to increase prices to get to the goal, and many other options - like what costs would have to be cut - and so on.
Then it's down to the practitioner, using their knowledge of the client and their professional skill and judgment, to offer comments and modifications to the software suggested options and to make a blend of small adjustments here and there to arrive at the required outcome.
Now, the practitioner can sit down and say something like, 'well, if you can increase your prices by 1.3%, reduce costs by 0.75%, and increase volume by 2.1%, the effect of these combined criteria will produce an additional $499,876 in profit next year.'
In my previous life as a practitioner myself, I would have spent hours and hours on excel spreadsheets trying to fathom out these answers, but with the tools available today, they can be calculated in a nano-second!
Boy, how things have changed.
For the forward-thinking practitioner these two tools can make a tremendous difference to the type of work they do, the revenues they can generate and the satisfaction they can deliver to their clients.
Just imagine if every client had the ability to see the financial impact of any business decision BEFORE they actually made that decision?
Don't you think you'd have better clients a s a result? And what impact would that have on your own professional and financial satisfaction?
So yes, I answered, I do believe that being Hi-Tech offers a real opportunity to differentiate the firm, make more money and enjoy your work a little more than you did before, and it's definately not a smoke and mirrors job!
Wednesday, January 13, 2010
Management by Kraft Dinner
February is often an odd month in my office. Many firms don’t want to do much at all as tax season heats up, while others are struggling with a last-minute panic and need something desperately.
Either way, I welcome February. As the snow builds up and the work slows down for a few weeks, it gives me a chance to ski, and I often take some time out in the month to reflect and do some strategic planning for my own business.
As I started doing some strategic thinking this year, a story from Christmas occurred to me that I thought you might like me to share with you.
It was around 22nd of December, and I was lining up at the grocery store with a cart full of groceries and seasonal goodies, when I noticed the people in front of me in the line. They were all young, about twenty years old, and the four of them moved their cart up to unload it on to the conveyor belt to transport it towards the cashier.
As they unloaded I couldn’t help but notice the contents of their cart. Dried noodles, packet after packet after packet, followed by soup packets and cans, one after the other again.
Then, of course, it was a pile of Kraft Dinner boxes, by the dozen. That gave it away for me. ‘Students!’ I thought to myself, obviously stocking up on Daddy’s credit card before going back to University.
But boy was I wrong.
As I passed my cornflakes, milk and some seasonal treats onto the cashier’s conveyor belt, I saw these four young men going through their wallets and pockets to come up with the $103.26 they had spent. They realized that they had two dollars spare, so one of them went and grabbed more soup to top up their spending.
With three cents change they all smiled at each other and I watched them as they pushed their cart – they got the one with the squeaky wheel that never goes in the same direction as the other three – and they emptied the contents of their cart into the food bank box behind the cashiers.
These guys had obviously spent their own cash and had been as careful to make sure that they bought the right stuff, and spent their entire budget, to make sure that those needier than themselves got to eat something this Christmas. It may not have been turkey and bread sauce, but damn it, these kids had heart.
I am not ashamed to tell you that it brought a lump to my throat.
Then I started thinking that this was a great example of the type of planning, budgeting and execution that we all need in our own businesses, but more often than not we are simply too busy to stop what we’re doing right now, that seems to be so important, to give some time and effort to the bigger picture.
Where is your practice right now? Where was it last year? Has it grown? Has it gone in a different direction? Where do you want your firm to be this time next year, in five years time, in ten?
These are often the issues we never talk about, even with ourselves. But we should.
When tax season is over and you have the 30th June filing deadlines behind you, please, take some time to plan where you want to take your firm in the future, and do the equivalent of what those kids at the grocery store did.
They got their team together, decided what they wanted to achieve, put a budget together, pooled their resources, set a deadline and worked together to gather the supplies.
They achieved their goal and then they went to the bar together to celebrate!
What a great example from four young men. Surely we, as a profession can do at least as well as them?
Either way, I welcome February. As the snow builds up and the work slows down for a few weeks, it gives me a chance to ski, and I often take some time out in the month to reflect and do some strategic planning for my own business.
As I started doing some strategic thinking this year, a story from Christmas occurred to me that I thought you might like me to share with you.
It was around 22nd of December, and I was lining up at the grocery store with a cart full of groceries and seasonal goodies, when I noticed the people in front of me in the line. They were all young, about twenty years old, and the four of them moved their cart up to unload it on to the conveyor belt to transport it towards the cashier.
As they unloaded I couldn’t help but notice the contents of their cart. Dried noodles, packet after packet after packet, followed by soup packets and cans, one after the other again.
Then, of course, it was a pile of Kraft Dinner boxes, by the dozen. That gave it away for me. ‘Students!’ I thought to myself, obviously stocking up on Daddy’s credit card before going back to University.
But boy was I wrong.
As I passed my cornflakes, milk and some seasonal treats onto the cashier’s conveyor belt, I saw these four young men going through their wallets and pockets to come up with the $103.26 they had spent. They realized that they had two dollars spare, so one of them went and grabbed more soup to top up their spending.
With three cents change they all smiled at each other and I watched them as they pushed their cart – they got the one with the squeaky wheel that never goes in the same direction as the other three – and they emptied the contents of their cart into the food bank box behind the cashiers.
These guys had obviously spent their own cash and had been as careful to make sure that they bought the right stuff, and spent their entire budget, to make sure that those needier than themselves got to eat something this Christmas. It may not have been turkey and bread sauce, but damn it, these kids had heart.
I am not ashamed to tell you that it brought a lump to my throat.
Then I started thinking that this was a great example of the type of planning, budgeting and execution that we all need in our own businesses, but more often than not we are simply too busy to stop what we’re doing right now, that seems to be so important, to give some time and effort to the bigger picture.
Where is your practice right now? Where was it last year? Has it grown? Has it gone in a different direction? Where do you want your firm to be this time next year, in five years time, in ten?
These are often the issues we never talk about, even with ourselves. But we should.
When tax season is over and you have the 30th June filing deadlines behind you, please, take some time to plan where you want to take your firm in the future, and do the equivalent of what those kids at the grocery store did.
They got their team together, decided what they wanted to achieve, put a budget together, pooled their resources, set a deadline and worked together to gather the supplies.
They achieved their goal and then they went to the bar together to celebrate!
What a great example from four young men. Surely we, as a profession can do at least as well as them?
Friday, October 30, 2009
Second Post Today!
While I've posted something useful earlier today, I thought I'd take this opportunity to announce that my first Novel is well on its way to a first draft. It's a little unusual... as the hero (or heroes) is/are Accountant(s)!
I am yet to come across any novel where a CA or CPA is the hero, and in this book they're anything but boring, I assure you!
I am announcing this because I'd like your help.
I am looking for a few CAs and CPAs to review the first draft and give me some critical feedback to make it a better product.
Please contact me if you'd like to be involved.
I am yet to come across any novel where a CA or CPA is the hero, and in this book they're anything but boring, I assure you!
I am announcing this because I'd like your help.
I am looking for a few CAs and CPAs to review the first draft and give me some critical feedback to make it a better product.
Please contact me if you'd like to be involved.
Seven Steps To Seven Figures (Part Two)
Last issue we lookedat the first three steps to building a seven-figure billing practice and I promised you we’d take a look at the other four steps this time.
So, without further ado, here we go!Remember last issue, we covered;1. Innovation & the Use of Technology2. Staff Selection, Training & Delegation3. Client Selection
The remaining steps are;1. Valued-Added Services2. Pricing3. Financial Acumen4. Marketing
So, let’s look at these four steps now...
Value-Added Services
I have just returned to the office after two weeks on the road with CCH.
During the road show, I have had the privilege of working with Mark Holton, an Aussie, who pioneered the use of CCH Profit Driver down under, and was on tour with us as the ‘Profit Driver expert’. And it’s a title he deserves. As a user of Profit Driver myself, it was amazing to see Mark in action, showing accounting firms just what this amazing piece of software can do.
There are alternatives out there – Principa (Ric Payne’s network, he of Ran ONE fame) offer a similar financial dashboard tool, but Profit Driver is, in my opinion, easier to use and thus my weapon of choice.Clients come to us as practitioners to buy something that, in all honesty, they don’ really want, but have to have – the compliance package that we prepare for them every year – the financial statements and tax return.And every year, we deliver the same old package of information.
It looks exactly like last year’s package, the only difference being that the numbers and dates have changed. And every year we have to charge a little more for this service.
However, while the client is coming to you for this service each year, that’s not what they want from you!What clients really want, is help to be more successful or more profitable, and they look to you for help and advice in how to do so.
But in most cases, every year, we let them down.
Why?
Because we’re too busy to be able to spare the time to sit down with our better clients and talk with them about their goals and aspirations for their business.
Especially during tax season, when we get to see the majority of our clients, we simply have to get each client in and out as quickly as possible because the next client is waiting in reception to see us and we often feel that we’re on a treadmill, and it’s not fun.
Value-Added services are the way forward for the profession.
Imagine sitting down with a client and being able to show them the financial impact of any business decision they’re about to make, BEFORE they make that decision.
Do you think that is something they’d like to be able to do?
Do you think your clients would make better decisions if they did?
You bet!
Discussing situations like ‘what would happen if I put my prices up by 5% but lost 10% of my volume as a result?’ or ‘If I changed my policy and paid my payables one week later, what impact would that have on my cash flow, bank overdraft and interest charges, even if I lost my early settlement discount as a result?’
What about ‘how many extra units do I need to sell to make an extra $100,000 profit?’
Ladies and gentlemen, these are the big ticket questions your clients have but are afraid to ask, as they’re working under the impression that you’re just too darn busy already!
Every seven-figure practitioner fires their bad clients to create the time to offer value-added services to their better clients, and once they’ve done it, they never look back!
Pricing
Many practitioners have a fear of pricing, and so we run back to the old method of using our time and billing system as a pricing tool. Wrong!
Our time and billing system has nothing to do with pricing.
It is an activity based costing tool, NOT a pricing tool!Better to talk with a client and ask ‘What would it be worth to get.... done?’ (You can fill in the blanks depending on each client’s situation.)
The client will then tell you the value of the project as it appears to them, and you can price accordingly.
Now, of course, you can’t do that on every client project – that’s crazy – but you absolutely can do so on the ‘special work’ that we generate each year.Because of a bad pricing policy, most practitioners leave money on the table, and that holds them back from achieving seven figures.
Financial Acumen
You might think that, as accountants, we have a lot of financial acumen. Not necessarily so when it comes to running your own business.
Many firms I see still have huge piles of unfinished files in Partner’s offices.This is equivalent to covering your floor with money – unfinished files that are causing a bottleneck in getting work finished and billed.
We need to deploy a great financial acumen if we’re going to get to seven figures.
Marketing
Finally, we need to market ourselves far better. The seven-figure firms all do it well, bar none.Take a look at your web site, your logo, your business card. Do they excite the reader and get them interested in finding out more about your firm?
I’d wager that they don’t.
When did you last take out a Banker, a Lawyer, an Investment adviser to lunch and try to get to know them better and explain what you’re trying to do in your firm?
When did you last say no ‘thanks, but no thanks’ to a potential new client because they didn’t match the profile you’re looking for in new clients?When did you last hold an entertaining and informative seminar for clients and prospects?
While your web site might look boring, I bet that the content is often worse! Clients won’t be excited by the new budget summary being uploaded, but they might be inspired to hear a success story of one of your clients.
Do you have a marketing plan and budget? I guess most of you won’t. Yet the seven-figure firms do!Go figure!
Conclusion
In the time and space constraints of a column, I can only give you a taste of what can be achieved, but those who deploy some of these tactics in their strategy will be the ones who achieve success.
Firms who decide what their ideal client looks like and goes after that type of business, who categorize their clients into, for example, A, B, C and D, and then systematically fires their D clients case by case, who offer value-added services to their better clients and price them accordingly, based on value – these are the firms who will be tomorrow’s seven-figure firms.
Good luck to you all.
So, without further ado, here we go!Remember last issue, we covered;1. Innovation & the Use of Technology2. Staff Selection, Training & Delegation3. Client Selection
The remaining steps are;1. Valued-Added Services2. Pricing3. Financial Acumen4. Marketing
So, let’s look at these four steps now...
Value-Added Services
I have just returned to the office after two weeks on the road with CCH.
During the road show, I have had the privilege of working with Mark Holton, an Aussie, who pioneered the use of CCH Profit Driver down under, and was on tour with us as the ‘Profit Driver expert’. And it’s a title he deserves. As a user of Profit Driver myself, it was amazing to see Mark in action, showing accounting firms just what this amazing piece of software can do.
There are alternatives out there – Principa (Ric Payne’s network, he of Ran ONE fame) offer a similar financial dashboard tool, but Profit Driver is, in my opinion, easier to use and thus my weapon of choice.Clients come to us as practitioners to buy something that, in all honesty, they don’ really want, but have to have – the compliance package that we prepare for them every year – the financial statements and tax return.And every year, we deliver the same old package of information.
It looks exactly like last year’s package, the only difference being that the numbers and dates have changed. And every year we have to charge a little more for this service.
However, while the client is coming to you for this service each year, that’s not what they want from you!What clients really want, is help to be more successful or more profitable, and they look to you for help and advice in how to do so.
But in most cases, every year, we let them down.
Why?
Because we’re too busy to be able to spare the time to sit down with our better clients and talk with them about their goals and aspirations for their business.
Especially during tax season, when we get to see the majority of our clients, we simply have to get each client in and out as quickly as possible because the next client is waiting in reception to see us and we often feel that we’re on a treadmill, and it’s not fun.
Value-Added services are the way forward for the profession.
Imagine sitting down with a client and being able to show them the financial impact of any business decision they’re about to make, BEFORE they make that decision.
Do you think that is something they’d like to be able to do?
Do you think your clients would make better decisions if they did?
You bet!
Discussing situations like ‘what would happen if I put my prices up by 5% but lost 10% of my volume as a result?’ or ‘If I changed my policy and paid my payables one week later, what impact would that have on my cash flow, bank overdraft and interest charges, even if I lost my early settlement discount as a result?’
What about ‘how many extra units do I need to sell to make an extra $100,000 profit?’
Ladies and gentlemen, these are the big ticket questions your clients have but are afraid to ask, as they’re working under the impression that you’re just too darn busy already!
Every seven-figure practitioner fires their bad clients to create the time to offer value-added services to their better clients, and once they’ve done it, they never look back!
Pricing
Many practitioners have a fear of pricing, and so we run back to the old method of using our time and billing system as a pricing tool. Wrong!
Our time and billing system has nothing to do with pricing.
It is an activity based costing tool, NOT a pricing tool!Better to talk with a client and ask ‘What would it be worth to get.... done?’ (You can fill in the blanks depending on each client’s situation.)
The client will then tell you the value of the project as it appears to them, and you can price accordingly.
Now, of course, you can’t do that on every client project – that’s crazy – but you absolutely can do so on the ‘special work’ that we generate each year.Because of a bad pricing policy, most practitioners leave money on the table, and that holds them back from achieving seven figures.
Financial Acumen
You might think that, as accountants, we have a lot of financial acumen. Not necessarily so when it comes to running your own business.
Many firms I see still have huge piles of unfinished files in Partner’s offices.This is equivalent to covering your floor with money – unfinished files that are causing a bottleneck in getting work finished and billed.
We need to deploy a great financial acumen if we’re going to get to seven figures.
Marketing
Finally, we need to market ourselves far better. The seven-figure firms all do it well, bar none.Take a look at your web site, your logo, your business card. Do they excite the reader and get them interested in finding out more about your firm?
I’d wager that they don’t.
When did you last take out a Banker, a Lawyer, an Investment adviser to lunch and try to get to know them better and explain what you’re trying to do in your firm?
When did you last say no ‘thanks, but no thanks’ to a potential new client because they didn’t match the profile you’re looking for in new clients?When did you last hold an entertaining and informative seminar for clients and prospects?
While your web site might look boring, I bet that the content is often worse! Clients won’t be excited by the new budget summary being uploaded, but they might be inspired to hear a success story of one of your clients.
Do you have a marketing plan and budget? I guess most of you won’t. Yet the seven-figure firms do!Go figure!
Conclusion
In the time and space constraints of a column, I can only give you a taste of what can be achieved, but those who deploy some of these tactics in their strategy will be the ones who achieve success.
Firms who decide what their ideal client looks like and goes after that type of business, who categorize their clients into, for example, A, B, C and D, and then systematically fires their D clients case by case, who offer value-added services to their better clients and price them accordingly, based on value – these are the firms who will be tomorrow’s seven-figure firms.
Good luck to you all.
Sunday, September 13, 2009
Seven Steps To Seven Figures (Part 1 of 2)
Back in the day, the ‘Million Dollar Practice’ was a big thing; it was an achievement of note, setting the practitioner apart from his or her competitors.
A ‘million dollar firm’ would have been a practice that dominated its local marketplace and allow the owner to gain real financial freedom.
But almost twenty years after people like Dave Cottle and Chris Fredericksen first spoke and wrote about the million-dollar practice, seven figure billings are now being achieved by many progressive sole practitioners.
I have clients, for example, yes, sole practitioners, who bill over $2.5m in fees each year. How do they do it? Well, we’ll get to that a little later.
Funnily enough, all of these million dollar (plus) practitioners have seven key attributes in common. And today I will share them with you.
If a seven figure firm is relatively easy to build today, why do the vast majority of sole practitioners tend to ‘flat line’ at billings somewhere between $400,000 and $600,000 a year? What is needed to project a firm from 6- to 7-figures?
Well, let me explain…
I won’t pretend that it’s quick or easy, but it is definitely possible!
Before we look at the seven steps, there are 4 other things they (mostly) do which can be layered over all seven steps.
a) Planning
b) Monitoring/Recording/Keeping Score
c) Amending
First of all, each and every one of them that I know plans. They prepare a business plan for their firm, as they would for a client.
Then, they monitor their performance against the plan and look for areas where they did not achieve their goals.
Next, they then try to determine why that was, then they amend their plan for the next period (usually quarterly) and move ahead. Where goals were exceeded, they examine what went well and why and try to take any learnings from this that could be applied to other areas of the firm.
If you look at the seven steps, you will probably agree, that all three layers can apply to all seven steps.
So, let’s take a look at these steps now.
1. The Desire to Innovate & The Use of Technology.
Public accounting is not known for its ability to be creative. Indeed, it has been a long time since the profession introduced a new service to the marketplace. It was probably the ‘Review’ engagement if my memory serves me right.
However, some firms have been very innovative by bundling services together to create tangible ‘products’ from what were previously considered intangible services, and priced them accordingly.
The other side of the innovation step, is that all of the 7-figure firms were obsessively upgrading their software and hardware – fully embracing technology as a tool that enabled them to exist in the way they do, rather than seeing I.T. as simply another cost-centre, to be contained and reduced at all cost.
The savvy firms assessed each I.T. investment opportunity by saying to themselves “What will this do for us? What will it do for our clients? What does the cost/benefit analysis tell us?” before making any major decision, but if the numbers stacked up, they always invested.
All of the firms I know of now have scanning and auto-flow software for their clients’ tax return preparation, taking the prep time per tax return tumbling down.
2. Staff Selection, Training & Delegation
‘Will this person fit in around here?’ is how most potential employees are assessed at interview. There is little focus on their accounting or tax ability. To paraphrase Jim Collins in Good To Great, their mentality is ‘get the right people on the bus and together they will determine where to drive it.’
Then, the owner has to have the strength of character to delegate work to these people - preferably to their level of incompetence (A sort of twist on the ‘Peter Principle’).
In other words, give people work that they’ve never done before and they’ll learn new skills.
They’ll grow professionally and it will be a better place for everyone to work. Provide excellent training and coach and mentor your people – one of them has to become your successor!
3. Client Selection
This really is a major point. For the most part, 7-figure sole practitioners only work with clients that:
a) Actually want and appreciate your services
b) See the value in what you’re doing for them
c) Have the money to pay the level of fees you want to charge
d) Have an ability to make referrals to similar people
e) Are fun to deal with – they’re people you actually like
Some firms like to establish a niche market to establish ‘top-dollar-rates’ (see the section on marketing in the next issue) while others just want to be seen as the premier firm to deal with , and price their services accordingly.
Clients who do not want to pay the extra because they do not see the value are clearly not the type of client that they will want to deal with so they have the courage to say ‘NO’ to these business people.
Imagine that!
Seriously, this is another very important point.
Indeed, if you have any existing clients you’d sooner not deal with, then you need to fire them before you have any real chance of moving forward.
The other 4 steps are:
1. Value-Added Services
2. Pricing
3. Financial Acumen
4. Marketing
And we will cover these issues next time.
Back in the day, the ‘Million Dollar Practice’ was a big thing; it was an achievement of note, setting the practitioner apart from his or her competitors.
A ‘million dollar firm’ would have been a practice that dominated its local marketplace and allow the owner to gain real financial freedom.
But almost twenty years after people like Dave Cottle and Chris Fredericksen first spoke and wrote about the million-dollar practice, seven figure billings are now being achieved by many progressive sole practitioners.
I have clients, for example, yes, sole practitioners, who bill over $2.5m in fees each year. How do they do it? Well, we’ll get to that a little later.
Funnily enough, all of these million dollar (plus) practitioners have seven key attributes in common. And today I will share them with you.
If a seven figure firm is relatively easy to build today, why do the vast majority of sole practitioners tend to ‘flat line’ at billings somewhere between $400,000 and $600,000 a year? What is needed to project a firm from 6- to 7-figures?
Well, let me explain…
I won’t pretend that it’s quick or easy, but it is definitely possible!
Before we look at the seven steps, there are 4 other things they (mostly) do which can be layered over all seven steps.
a) Planning
b) Monitoring/Recording/Keeping Score
c) Amending
First of all, each and every one of them that I know plans. They prepare a business plan for their firm, as they would for a client.
Then, they monitor their performance against the plan and look for areas where they did not achieve their goals.
Next, they then try to determine why that was, then they amend their plan for the next period (usually quarterly) and move ahead. Where goals were exceeded, they examine what went well and why and try to take any learnings from this that could be applied to other areas of the firm.
If you look at the seven steps, you will probably agree, that all three layers can apply to all seven steps.
So, let’s take a look at these steps now.
1. The Desire to Innovate & The Use of Technology.
Public accounting is not known for its ability to be creative. Indeed, it has been a long time since the profession introduced a new service to the marketplace. It was probably the ‘Review’ engagement if my memory serves me right.
However, some firms have been very innovative by bundling services together to create tangible ‘products’ from what were previously considered intangible services, and priced them accordingly.
The other side of the innovation step, is that all of the 7-figure firms were obsessively upgrading their software and hardware – fully embracing technology as a tool that enabled them to exist in the way they do, rather than seeing I.T. as simply another cost-centre, to be contained and reduced at all cost.
The savvy firms assessed each I.T. investment opportunity by saying to themselves “What will this do for us? What will it do for our clients? What does the cost/benefit analysis tell us?” before making any major decision, but if the numbers stacked up, they always invested.
All of the firms I know of now have scanning and auto-flow software for their clients’ tax return preparation, taking the prep time per tax return tumbling down.
2. Staff Selection, Training & Delegation
‘Will this person fit in around here?’ is how most potential employees are assessed at interview. There is little focus on their accounting or tax ability. To paraphrase Jim Collins in Good To Great, their mentality is ‘get the right people on the bus and together they will determine where to drive it.’
Then, the owner has to have the strength of character to delegate work to these people - preferably to their level of incompetence (A sort of twist on the ‘Peter Principle’).
In other words, give people work that they’ve never done before and they’ll learn new skills.
They’ll grow professionally and it will be a better place for everyone to work. Provide excellent training and coach and mentor your people – one of them has to become your successor!
3. Client Selection
This really is a major point. For the most part, 7-figure sole practitioners only work with clients that:
a) Actually want and appreciate your services
b) See the value in what you’re doing for them
c) Have the money to pay the level of fees you want to charge
d) Have an ability to make referrals to similar people
e) Are fun to deal with – they’re people you actually like
Some firms like to establish a niche market to establish ‘top-dollar-rates’ (see the section on marketing in the next issue) while others just want to be seen as the premier firm to deal with , and price their services accordingly.
Clients who do not want to pay the extra because they do not see the value are clearly not the type of client that they will want to deal with so they have the courage to say ‘NO’ to these business people.
Imagine that!
Seriously, this is another very important point.
Indeed, if you have any existing clients you’d sooner not deal with, then you need to fire them before you have any real chance of moving forward.
The other 4 steps are:
1. Value-Added Services
2. Pricing
3. Financial Acumen
4. Marketing
And we will cover these issues next time.
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