In this blog, we present four key actions that you can take to transform your firm without compromising profitability and, more importantly, by reducing your and your team’s hours., work-life balance, and target client satisfaction. The opportunity is now; let's seize it before the window closes.
1. Reprice for Quality of Life and Sanity
If your average hourly charge rate is below $200, it's time for a significant price increase. Annually adjusting your prices isn't just good practice; it's essential for maintaining a profitable, healthy firm. Don’t get left behind. Renew members are constantly surprised at how few clients leave when they adjust their pricing. You have spent years accumulating expertise that translates into value for your clients.
Ask yourself this question; would you rather be a fine-dining restaurant, or a fast-food outlet? Just as patrons are willing to pay more for a gourmet meal and an exquisite dining experience, clients are willing to pay more for high-quality, personalized tax, accounting and advisory services. Price accordingly.
By the way, at Renew, one of our mantras is to price like it’s 3/24…all year round!
2. Reclaim your Firm by Dictating the Terms of the Client Relationship
Imagine a tax season where 70-hour weeks are a thing of the past. It's possible if we rethink our approach. Some Renew firms are mandating a 40-hour workweek limit during the tax season. This might seem like a fantasy, but it's achievable when you work with a select number of target clients, and you dictate the terms of the client relationship.
For example, you decide who can be a client of your firm and who can’t. You decide the services you will offer and how you will price them. You decide when you do the work for the client, and when they need to get their information to you. You decide HOW they will provide you with that information. If they don’t or won’t comply, there are many other firms who will be delighted to have them. Make your firm your number 1 client and play to win.
3. Terminate Non-Target Clients
Speaking of clients who won’t comply, for many firms, now is the time to let go of clients who don't fit your business model - those who undervalue your services, are consistently late in providing necessary information, who don’t want a trusted advisor relationship but instead, are simply looking for the cheapest tax preparer. Or maybe they simply don't mesh well with your firm's culture – you and your team just don’t like them.
The story goes that Michelangelo was once asked how he sculpted his masterpiece, David. He replied that it was easy; he simply chiseled away anything that wasn’t David. Similarly, you can chisel away at clients who don’t respect your expertise and are not willing to pay for the value you create. When you do that, you reduce stress and create room for more profitable target clients.
4. Set Minimum Prices
To avoid the chaos of low-paying clients, set minimum prices. Most Renew firms have established minimums of $1,000 for individual clients and $4,000 for business clients (on the low end). Perhaps you’re reading this while having your morning coffee. Think about the filter in a coffee machine – it only lets the right-sized grounds through for the perfect brew. You can do the same with clients. Minimum prices is one strategy that can ensure that each client is worth your time and effort.
Run the numbers; imagine if you DOUBLED your prices…how many clients could you afford to lose before you are any worse off? And what’s the likelihood of you losing more than that number?
Take Action Now
The window of opportunity for implementing these changes is wide open, but it won't stay that way forever. The time to act is now. Goal-seek to maintain profitability and drive down hours. By implementing the four actions listed above, you can see quick results and move the needle before you’re sucked back into the tax season vortex.
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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