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.