When I started my own accounting firm in 1996, for the first 2 or 3 years I seemed to attract lots of business start-ups.
I spent a lot of time helping them, giving advice, telling them what they needed to do for tax purposes, how to keep their books in order – they had tons of questions.
But I had no idea how to price.
I avoided the pricing conversation. I just answered all their questions and kept my fingers crossed that at the end of the year I would get the end of year accounts and pray that I could charge enough to make some money.
Unfortunately, what I often found was that some of those business start-ups didn’t actually make it through the first year. All that time I spent helping them for free was wasted. The businesses that did make it past that first year often struggled to pay my fees.
By the way, you can watch the video here if you prefer...
Business Start-Ups are Tough
For a while I thought I should stop focusing on business start-ups because they are very tough for a number of reasons…
Reason #1: Business start-ups tend to need more help. They are new to business and they have a lot of questions.
Reason #2: They don’t have any money. Being brand new they likely don’t have a big budget to play with.
Despite these obvious difficulties, there are some business start-ups that are worth having.
I did something that was very successful in my business…
Here’s what I did
I created a specific service for business start-ups.
For that service I created 3 different packages with 3 different prices. The entry level was for those clients that just wanted some very basic support, such as help setting up with tax authorities and answering a few questions – the sorts of things that we would do as a matter of course. I packaged it nicely and gave it a name.
Some start-ups wanted some more support. They perhaps wanted some tax planning ideas. So my second package included tax planning and was aimed at those business start-ups that were particularly interested in saving tax.
The third package was aimed at those start-ups that were really ambitious and wanted to grow their business fast. In their package, not only did they have the basic compliance, but they also had the tax planning, and some advisory support to help them grow their business.
Each package had a price.
This way, when business start-ups came to me they were given a choice of packages, and they would start paying me immediately, before I started answering all of their questions for free.
This was not the price for their compliance work – I still charged them at the end of the year for doing the financial statements and tax returns and such.
This start-up package was an additional service with an additional price.
When I teach this to people they sometimes ask me:
“Is this start-up package optional or is it compulsory that all business start-ups purchase one of these packages?”
I made it compulsory
If a business start-up came to me, and they were not willing to invest money every month into my support service, I would consider them to be not sufficiently serious enough about their own business to be worth my time.
By charging a fee for a valuable service, it becomes a great pre-qualifier.
Those clients that will pay you straight away for your monthly support are the businesses that will value you and your work and are genuinely serious about being in business.
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Wishing you every success on your pricing journey.
Chartered Accountant, Public Speaker and Author of Amazon No.1 Best-Seller, “Effective Pricing for Accountants”
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