We have transformed hundreds of firms over the past 25 plus years. Transformation comes in assorted flavors yet often boils down to fewer hours, more profits, and better clients. When we ask Renew firms what they would have done differently the two primary responses are: “wish I would have done this 10 years ago” and “wish I would have raised my prices more the first year.”
One thing we learned from COVID is that there is no promise of tomorrow. This is no dress rehearsal. Many firms focus on the pot of gold at the end of the rainbow, (waiting to get paid until they sell their firm which is a perilous mistake) or incremental business model change (have you ever watched paint dry?).
Do not wait to get paid on exit. If you build a profitable firm with a great income, the exit has a better chance of coming to fruition. If you build a marginally profitably firm, the exit will unlikely never come. Put another way, you can’t have one without the other.
Incremental business model change is often a result of a scarcity mindset and/or bad math.
Most firms in the small to mid-size segment started with low prices and didn’t raise them annually. Can you say, “what got us in this mess in the first place?”. They solve their problems by working more hours (pipeline of accounting students root cause).
Bad math is not understanding you can raise prices by 20%, with a 40% margin and lose 33% of your clients and end up profit neutral but work FAR less. Are you better off? Do you think you could attract more team members?
I spoke with a Renew firm (sole practitioner) in Phoenix yesterday who made $800K last year working 2,000ish hours and taking over 6 weeks of vacation. Hello! When we started working together he was making $200K and working over 2,500 hours per year.
You may be thinking well what did he do?
Here’s the secret sauce:
- Mindset
- Upgrading and attracting target clients
- Removing non-target clients
- Pricing
- Business model
- Bite-size benchmarks
Here is a link to our price/volume calculator if you’d like to do some scenario planning.
If not now, when?
About Renew Group
Shannon Vincent and Colin Dunn created Renew Group to create a better model and better lives for accounting firms. Our Firm Transformation Framework is the blueprint to a better model and a better life. Through education and training, templates, tools, and resources, coaching and community, our framework delivers life-changing results.
To learn more about transforming your firm, subscribe to Renewsletter. We offer practical tips to transform your accounting firm with Less Hours, More Profit, and Better Clients.
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