I got a question the other day from a lovely lady called Kim.
She showed me her plans to launch a new service and then asked:
“Is this a good idea?”
It got me thinking…
The current buzzword in the accounting space is business advisory. Accountants want to start launching their own business advisory services.
This can be a great thing to do… but some people really struggle with it.
If you are going to launch something brand new, like business advisory, and you want to go all out on that new service, there are 3 things you really ought to consider first...
By the way, you can watch the video here if you prefer...
Can you do it?
I know many accounting and bookkeeping firms who are doing an amazing job with business advisory. However, I have also found that...
One of the things that holds us back in pricing is a lack of confidence.
Accountants and bookkeepers are terrified of hearing those dreaded words ‘that’s too expensive’. We have a fear of rejection, and so we keep our prices low in the hopes that the client will say yes.
Here’s the problem…
When your prices are too low you end up having to work much harder and much longer hours just to make ends meet.
You need to change your mindset. You need more confidence. Here are 5 things you can do to build your confidence in pricing…
Confidence comes from knowledge.
You need to become obsessed with gaining knowledge on how to value price.
If you don’t understand value pricing – the systems, the techniques, the price psychology – then you will always be a little apprehensive when giving your price.
It’s the same with anything in life: the more we learn how to do something,...
If you ever give a single price to a client, you can guarantee that price is wrong.
Everyone values things differently – it’s one of the difficulties we have to deal with when value pricing.
You have no idea how much any client is going to value the work that you do, so it’s your job to get as close as possible to what economists would call the buyer’s reservation price – more commonly referred to as the maximum willingness to pay.
Why You Should Charge As High As You Can
The majority of the accounting profession are undercharging massively because of the fear of rejection and losing clients.
When you undercharge, you will find you end up having to cut corners, skip out on valuable extras and not give the client the results they really want.
It’s not intentional, but because you are so busy, you end up rushing jobs, making small mistakes or missing out on potential opportunities for the client.
Sometimes we use discounts to try and win new clients – this is a terrible idea.
We allow ourselves to lower our prices by telling ourselves that we will make up for it in the future - that we will raise the prices next year and start making a profit.
Then we never do it.
The first price you give creates an expectation with the client. If you start off cheap, they are always going to expect you to be cheap, and you’ll find it much harder to raise your prices once this expectation has been created.
The Golden Rule: Never Discount
You should not give out discounts to win clients.
Maintain the integrity of your pricing structure. Be confident about the value you deliver to your clients. Do not discount.
The most successful businesses don’t give discounts. Think about it – when was the last time Apple ran a sale? When was the last time Starbucks lowered their prices? When was the last time you walked past a Ferrari...
Software is becoming increasingly prevalent in the accounting profession.
There are tons of apps out there that can help make the lives of accountants and bookkeepers so much easier.
It can be overwhelming just how many different tools there are, and many accounting professionals worry about the ongoing costs of subscriptions. This is the excuse they use for not investing in any of these helpful tools.
As a profession we tend to be very focused on costs – but what we need to do is think more like entrepreneurs and consider the return on investment.
The big question you need to ask when looking into software is: what are the benefits?
Ask yourself this question when researching your software tools and come up with a list. It may be that it:
I had an email from someone recently questioning the subscription costs of my software Effective Pricing.
I recently got an email from one of the members of the Value Pricing Academy.
She’d just attended one of my live webinars where I was sharing my own story about how, when I started my accounting firm back in 1996, I grew from 0 to over 200 clients in just a few years.
Here’s what she said in her email…
Today’s session was again full of great content.
Mark, you mentioned 4 prospects a week. Where I am located, I’d love to have 4 prospects EVERY month. Some months we get 4, then we go 2 or 3 months without any.
I am currently reluctant to do much marketing because of staffing issues. My fear is getting too much work and not being able to handle it all…”
I know exactly where she is coming from.
I made the mistake myself in my firm of becoming obsessed with winning clients. I thought that having a successful practice was measured by growth and being as big a firm as possible.
These thoughts are common because of the...
If you have an obsession with costs, it could be holding your business back.
Simply by changing your mindset to think in a more entrepreneurial manner it will open so many doors for you, and your firm will explode with growth.
One of the things I have noticed within the profession - perhaps because we are numbers experts and deal with accounts on a regular basis - is that accountants and bookkeepers are very focused on costs.
Many years ago I heard this great phrase:
“You can’t cut your way to greatness.”
There is so much truth in that.
When you look at successful businesses and successful entrepreneurs, they think very differently to others. They have a very different approach to costs – they view them rather as investments.
Countless times I have seen accountants and bookkeepers complaining about costs of things such as software. They feel they can’t afford it, or are reluctant to pay so much money just for an app.
Everybody in the profession seems to be talking about business advisory work. And yet many accounting firms don't know where to start…
I recently came across an amazing success story posted in my Facebook Group, "Value Pricing with Mark Wickersham".
It's from an extraordinary accountant from Durango, Colorado called Zeb Smith. Let me share that story with you, and then we'll dissect it.
There are a number of learning points in this case study, and here are my top 5:
Are you working crazy long hours and making very little money?
You’re not alone.
The root cause of this issue is that accounting professionals are pricing too low because we are terrified of being rejected.
We hate it when someone says ‘no’ or ‘that’s too expensive’.
So, we make the mistake of giving a price that is low because we want the client to say ‘yes’. But when they do say ‘yes’ to your first price, it means you have priced too low, and left money on the table.
I’m going to share with you the concept of optimal pricing - it’s a better way of thinking about how to price and it’s the best approach to make sure you get the maximum amount of money for every job.
Optimal Pricing Works Like This…
The price for anything falls somewhere between your costs and the value to the customer.
But it’s not quite as simple as that because you want to make a profit,...
Do you ever go out to meet a new potential client and during the meeting you start to realise they are just a tyre-kicker, they just want the cheapest - those clients are a pain. My American students call them PITA clients (see if you can work out what that stands for).
When I started my accounting firm back in 1996, probably around half the meetings I went to were a waste of my time.
Our time is precious. Not Every Client Is a Good Client. So, how do we deal with these time wasters?
I’m going to share with you 3 strategies for avoiding tyre-kickers and PITA clients… (if you want to know a 4th, you can read this blog too: How To Pre-Qualify Clients And Avoid Time Wasters)
#1 - Positioning
Think about your website. Think about the wording on your website.
What is the message? Have you made it clear who your ideal client is? Or, like most accounting professionals, does the message say that you are available to everyone and...