Very often businesses want to grow.

As their accounting professional, you are one of the best people to help them do that.

Growing a business is about understanding the numbers and developing core strategies for growth. In any business, there are 3 main ways to grow.

The marker for growth tends to be measured by the top-line sales. We are always striving to increase sales. The problem is, you can’t manage sales directly. It’s the end result of a series of other processes.

You can watch the video here.

Sales is made up of 3 core elements…

• Customers: The number of customers a business has in a year
• Frequency: How often those customers buy in a year
• Amount: How much they spend on each purchase

If you had a business with 100 customers, and each of those customers bought on average 4 times a year, you will have 400 transactions in a year. If each customer spends on average $100 on each transaction, then your annual sales would be $40,000.

Here’s...

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...

Clean-up work is one of those services that can feel quite tricky to price.

When a client comes to you with their books and records in a complete mess and they ask you to fix them and give a price – the difficulty is the huge amount of uncertainty.  

You have no idea how much work is going to be involved. You can try asking the client to get a better idea, but sometimes they aren’t any more clued up on their books!

You might ask when they last reconciled their bank account and they tell you it was a few weeks ago, but in reality it hasn’t been reconciled properly for 6 years.

The clients don’t know the answers and you won’t know the true scope of the work until you actually start.

It’s challenging – so how do you price that?

By the way, you can watch the video here if you prefer...

Option 1 – Charge an Hourly Rate

This is what most accountants and bookkeepers do, but it’s the worst possible way of pricing.

Customers...

During the time of writing this blog, we are in a global pandemic causing a lot of issues for a lot of businesses. Of course, even outside of COVID19, we often go through tough times with recessions and such.

A question I get asked so often, and even more so with the current situation, is: 

“How to you change your approach to pricing when times are tough?”

It’s a difficult and delicate matter, but here are different ways you can think about your pricing during these hard times…

By the way, you can watch the video here if you prefer...

Should I reduce my prices?

Absolutely not!

You have to stay in business. If you don’t stay in business, you can’t help your clients! You have to stay commercial.

Not everyone is struggling

Even though times are tough, not everyone will be struggling in the same way.

Some businesses even thrive in these times of crisis.

There is no need to discount your prices for businesses that can still afford...

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?

• Can you deliver that solution?
• Do you have the skills, or are you willing to learn the skills?
• Are you ready to do what is necessary to develop a successful service and deliver huge value?

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…

(You can watch the video here).

#1 - Build Your Knowledge

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.

You can watch the video here.

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.

Undercharging...

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.

You can watch the video here.

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.

You can watch the video here.

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:

• Saves you time
• Makes you more money
• Helps you win clients
• Makes your business run more smoothly

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…

“Hi Mark,

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...