Everybody in the profession is talking about moving from hourly rates to value pricing.
But people who are new to this journey, particularly people pricing services like bookkeeping and clean up work, all make a big mistake.
They try to move straight to value pricing in one big jump, and they get it all wrong.
I have seen people posting things like this on social media so often…
“I had a go at value pricing some clean up work and it went so horribly wrong, I just went back to pricing based on the hour.”
It makes me so sad.
The problem is, for compliance services like bookkeeping, moving all the way from hourly rates to value pricing is just too big of a jump to get right.
It’s too much to achieve in one go.
Value pricing compliance services conceptually isn’t easy.
Value is subjective. You can’t touch it or feel it, you can’t easily put a number on it. What is the value of bookkeeping work? What is the value...
When I ask my students what their marketing strategy is, very often they tell they they haven’t got one.
I understand them really because when I started my accounting practice in 1996, I didn’t have a marketing strategy either.
Very often we don’t have a marketing strategy because it seems like something that is really complicated and time consuming. After all, loads of people these days are getting marketing degrees and qualifications.
But sometimes people overcomplicate marketing.
I like to keep it simple.
Really, to create a great marketing strategy, there are only 3 things you need to do.
1 - Ideal Client Profile
Who is your ideal client?
You need to know who that is - in writing.
Look at your best clients. What characteristics do they have? What sort of clients do you like working with. What size business? What kind of turnover? What industry? Where are they located? What are their personalities like?
You need to...
Accountants and Bookkeepers are always asking me:
“What should I be charging as an hourly rate for bookkeeping?”
I get asked this particularly from bookkeepers who are starting their business journey.
So I decided to find out, definitively what the profession is charging. So let’s look at that. Also, later I’m going to share with you how you can get 30 days of free access to some of my best training.
Hourly Rates for Bookkeeping
I recently created the world’s largest ever study, with 2683 participants, into what people are charging for their bookkeeping services.
One of the questions I asked in the survey was:
“If you price based on an hourly rate, what is that hourly rate?”
This graph shows the findings…
As you can see, at the bottom end of the spectrum, there are accounting professionals charging as little as $19 an hour for their bookkeeping services. This is a ridiculously low price.
Bookkeeping is a highly valuable...
Tell me, what is your pricing strategy?
Oh, you haven’t got one?
Neither did I when I started my accounting practice back in 1996, and I made every mistake under the sun.
I didn’t have a pricing strategy, so the way I priced was crazy.
I Was Way Too Cheap
I wanted to grow my business, and I naively thought the best way to do that was to be the cheapest.
I’d deliver loads of value in meetings with prospective clients, then when they asked for the price I told them I’d think about it and let them know.
I’d ask for a copy of their last set of accounts telling them I would look for more tax saving opportunities for them. What I was really doing was flicking to the last page where it says ‘Audit and Accountancy Fees’, and checking what they were paying their previous accountant.
Then, I’d make my price LESS than the previous accountant.
In hindsight, this was totally crazy.
I’ve since conducted a lot...
Most business owners will have never been faced with such a drastic situation.
They are probably feeling…
Not to mention the very real fear of losing loved ones.
You might be feeling the same things yourself.
It’s a really difficult time for business owners. Your help is going to be treasured by your clients, so here are a few quick tips on how you can be actively helping them...
I ran a full webinar on this recently - you can watch the whole thing here.
Ways You Can Help Your Clients
Here are a few things you can do to really help your clients through COVID19:
My students are constantly asking me how they can avoid scope creep, and there are a few things that I always tell them.
But before I tell you what those things are, just so we are on the same page, let’s start by covering what scope creep actually is.
Let’s say you agree to do some work for a client, and you agree on the fee you are going to charge, but then as you work through the project, it ends up taking you longer than you thought and you don’t actually make a profit on the job.
That’s scope creep.
Scope creep is when the work takes longer than you expect.
It’s partly a pricing issue, partly a project management issue.
I’m going to share with you a few ways you can deal with it.
What Causes Scope Creep
You can’t deal with your scope creep until you have identified what is actually causing it.
There are essentially 4 main types of scope creep:
Do you ever feel so overwhelmed, with so much going on that you are not sure what to do next?
That comes from a lack of clarity.
I thought I would share in this blog, how you can get that clarity back.
To get your clarity back, there are 5 things you need to get in place…
1 - Have A Clear Vision
You need to be really clear on what your vision is.
What are you trying to achieve in your business? What will your business look like when it is ‘done’? When you are ready to retire and sell, what does your business need to look like?
Write it down.
How big will it be? What do the profits look like? The turnover? Where will it be located? Will there be multiple offices? How many employees? What will the business be doing? What kind of customers will you have?
You need to really carefully think about what your business will look like when it’s ‘done’.
But, this vision is probably what your business will look...
‘I struggle with selling! I don’t know what to say to new clients.’
The issue accounting professionals have with ‘selling’, is the wrong mindset. We think that to be good at selling, we need to have good selling techniques, we need to have good ‘closing’ techniques. But that’s not actually necessary.
A while back I read a book called ‘Spin Selling’ by Neil Rackham. If you haven’t already read it, I highly recommend you add it to your reading list.
In this book, Neil conducted a huge study into the results from sales processes. One of the things he found, was having special closing techniques did not significantly change the outcome.
That reassured me a lot because I’m really not a fan of overly ‘sales-y’ closing techniques. I’m sure you feel the same.
So how do we sell?
One of my mentors Peter Thompson taught me something a few years ago. He said this…
If a prospect is contacting you only because they want some information, and you have valuable content that positions you as an expert, why wouldn’t you share that with people?
This is a great chance for you to demonstrate your expertise and show your value.
However, if a prospect is calling because they want to know your price, that is a different issue.
If someone is simply asking for a price, it is a red-flag. This person is likely to be focused solely on the price of the service - they are a price shopper and only want the cheapest service.
These types of people never appreciate the value you can provide and will always be problematic when the time comes to pay the bill. They are not worth your time.
You don’t have to take on every single client that contacts you. You should only take on the clients that are right for your business.
So What Should You Say To Those Callers?
You should absolutely have a meeting with...
I recently ran a survey asking 2683 accounting professionals what they charge for their bookkeeping services.
The participants predominantly consisted of accountants both qualified and unqualified, and bookkeepers both certified and non-credentialed.
I wanted to know how they were pricing their bookkeeping services, but also how much they were charging.
One of the questions I asked in the survey was…
“Do you review your prices for every client at least every single year?”
The answer to that should be overwhelmingly YES. We absolutely should be increasing our prices every single year, for 3 key reasons…
Prices change every year, they always go up because of inflation. Your prices should increase every year as well - your clients expect this.
You should also be reviewing your prices because your clients’ circumstances are likely to change. If you’ve been helping them, their business is surely...