Pricing impacts many of the day-to-day decisions you make. It’s important you make your pricing a priority and not see it as a task to get done. It’s discipline to master, one that requires both art and science.
Here are a few examples of how pricing impacts your day to day:
- Do I take on this client?
- Do I work more?
- Can I hire this team member?
- Can I buy this piece of software?
Profits which are largely determined by pricing. Profits are firm oxygen and industry oxygen. Pricing is critically important, yet most small firms aren’t great at it.
Here are a few reasons accounting firms tell us they stink at pricing:
- We don’t emphasize pricing enough.
- We price too quickly.
- We worry about what clients will say if we raise prices.
- We don’t raise prices every year.
- We price alone.
- We don’t have price or leverage targets.
- We seek approval.
- We want to be liked.
- We price based on time rather than value.
- We come from a place of scarcity.
- We lack a business model.
It’s critically important you raise your prices every year. Your other costs increase every year: rent, labor, software etc. Far too many firms’ profitability erodes because they don’t raise prices every year and as a result, they have to work more hours to make the same money. How is this working for the profession? This translates into not having enough time to invest in pricing which results in more work and more fatigue, driving a scarcity mindset.
So where do you go from here:
- The most important principle at Renew is to Make the Firm #1 Client. That is, by making your firm the #1 client you will create the most value for the right stakeholders. Many firms pay lip service to working on the firm. You need to make the mental and emotional commitment that pricing is one of the most important things you do.
- Block the time in your calendar to Make the Firm #1 Client.
- Set targets and get after it.
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.
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