It’s difficult to say no to your clients when they ask you to do a small task.
But it’s taking up your time. And you are not getting any money for it.
There are some tasks we often get asked to do, like:
These are really simple, easy tasks that we often just do for free.
But this is actually a form of what’s called scope creep.
Scope creep is when the work we do for a client ends up taking longer than we imagined, and therefore we end up spending more on costs, writing time off, and ultimately making a loss on the job.
Why do we let this happen?
It happens for two main reasons:
This is a huge problem. We are giving away so much for free.
But there are stages of tackling this problem.
Build your conscious awareness
We need to identify what things we are doing for free. Things like abbreviated accounts, setting people up on a system or on apps, tax advice, training.
Once you’ve made a list of all the things you are not charging for, you’ll start to recognise when a project has taken longer and why.
How to price these small projects – starting simple
Very often these are very small projects, so the pricing doesn’t have to be overly complicated.
Here’s an example of what a very forward-thinking accountant Bob Hurd did:
When asked to perform a small job, a PSC form, rather than do it for free because it would only take a short time, Bob sent a message to all his clients:
“Normally I would be charging £75 for this, but because it is a relatively simple PSC I’ll do it for just £35, subject to being instructed by the 29th February 2016”
This was really clever; Bob created a reference price of £75 which made the £35 deal look really good, and he scheduled the work for February (a traditionally quiet month in the UK as it’s at the end of the tax season).
Within 24 hours Bob had 20 clients respond and a very short time later the work was done and Bob had a nice bonus amount of £700.
This illustrates the point that even with something incredibly simple, you can generate quite significant fees.
Taking your price to the next level: Menu Pricing
The next level of sophistication in terms of pricing would be to give the client different options using menu pricing.
Offer different priced packages with different levels of value and let the client choose.
You may have to get creative to add value to the simple tasks. But you can always improve the experience or the service in some small way.
Advanced Value Pricing
You can take this up a final level higher by building it into an even more sophisticated system, perhaps using software like Cloud Pricing where we can give the client various options and really involve them in the pricing.
Let’s take cloud accounting set up as an example.
Say you find yourself setting clients up on cloud technology seven or eight times a year, and it takes two to four hours each time, then that would definitely be worth spending some time to come up with a more sophisticated system. That would involve using a structured process, giving clients choices, not only bronze, silver and gold, but going beyond that, then pricing based on their exact needs, wants and circumstances.
One of my students, Sofia Botchway, realised she should be charging for setting her clients up on cloud accounting systems. She created a system and ended up making an extra £7000 from just 5 clients over 2 months - that’s what you could be missing out on.
These are some ways of pricing small tasks that usually get done for free. The money you get for these small tasks could build up to quite a significant figure.
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Wishing you every success on your pricing journey
Chartered Accountant, public speaker and amazon #1 best seller of “Effective Pricing for Accountants”
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