Why Your Mindset About Costs Is Holding Your Firm Back

value pricing Jun 23, 2020

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.

You can watch the video here...

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.

I understand this reaction, I am an accountant myself and appreciate that costs are important.

But, we need to change our mindset and instead consider: what is the return on investment?

 

I Learnt The Hard Way

When I started my own accounting firm back in 1996, I made so many mistakes. One of which was focusing on costs.

I tried to reduce my costs as much as possible and one of the things I did was hire students and under qualified staff. I spent so much time micro-managing them and correcting all their mistakes that eventually I realised…

…you get what you pay for.

3 or 4 years later I hired better people and instantly started getting better results, and a better return on investment.

It’s the same with many of our expenses. We tend to hold back and avoid paying money for things that will make life easier, like software, advertising, training our team.

 

Facebook Ads Are NOT Too Expensive

Another example is Facebook Ads. Some people say they are far too expensive, but let’s think of it with an entrepreneurial mindset…

You spend £2000 on Facebook Ads and it generates you 1000 leads. Of those 1000, just 20 decide to go ahead and book a meeting with you. You then manage to convert 10 of them with an average of £2000 annual fees.

So, £2000 invested in Facebook Ads has generated you £20,000 in revenue. Does that seem like an expensive cost now?

The entrepreneur would say not. They might even invest more money because it generates such good results.

Investing money in software is a complaint I hear a lot in the accounting profession. Software makes our lives easier, it makes our firms more efficient and it saves us time.

But think about this...

 

What is the value of your time?

If you could pay someone to do a job for you at a lower rate than the value of your own time, then it would be crazy to do that work yourself.

For the last 15 years, I have never mowed the lawn, cleaned the house, or washed my own car. I pay someone else to do those things, then I spend my time doing what I love – training you guys!

I know the value of my time, and it’s far more worthwhile for me to pay someone else to do the chores around the house so that I can focus on running my business.

You need to change your mindset. If you want to explode with growth, you need to view costs as an investment in your future.

If the value of your time is greater than the cost of the software, the advertising, the training, whatever it may be, then it makes more sense for you to invest in those expenses and spend your own time more wisely, focusing on growing your business.

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If you would like to learn more about value pricing, I run a free live training session with a different topic every month. You can join and ask me questions that I will answer live. Click here to register and I will send you an invitation to the next session.

And if you would like to join a community of like-minded accounting professionals learning to price more effectively and confidently, you can join my Facebook Support Group here.

Wishing you every success on your value pricing journey.

Mark Wickersham

Chartered Accountant, Public Speaker and Author of Amazon No.1 Best Seller, “Effective Pricing for Accountants”

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