080 How To Get Your Accounting Clients To Pay More

How do you get your clients to pay you more? The age old question. Today we're doing a challenge episode. Run through some really practical example for a given client, how to get them to pay you more. Ultimately comes down to how they value you, how they value the problems that you solve. But we're gonna freewheel this one, see how it goes, and come up with what's hopefully some more real life, like an example of actually working through this stuff in the wild. Come on in, it's Jason Daly. Thanks for joining in. Hey, if this is your first time as a daily pod where we talk shop about running accounting firms, and I'm a believer that the most common issue with accounting firms, where it's too much work, where you're exhausted, where you're not making as much money as you should, is pricing. And so we do talk about pricing a lot, but it's usually through the lens of you gotta increase your prices. And everybody kind of gets that. And that is hard to do for a number of reasons. From imposter syndrome of just being like, wow, can I really charge this much? But the big thing, like, regardless of how you price, how you bill, whether you are a value pricing nerd, hourly pricing, whatever, the underlying issue there that we often face is not all clients value what you do to the same degree. So if you think about the client list that you have right now, you could probably put your finger on a couple of people on that client list who massively value what you do. Either because in the past they got it wrong, maybe because you have expertise that's very specific to them that would be hard for them to find elsewhere. For whatever reason, they super value you. And whenever you send them that bill, they're like, no problem, buddy, happy to pay it. And then on the opposite end of the spectrum, you've got people on that client list where every invoice feels like a choreography. You send it off and you're like, yep, they're going to complain about this. And then the next time you go to send it off, you're like, oh, here's what it really is. But like, do I write it down? Because I just don't want to have that fist fight. But then you're kind of like reinforcing, you know, them getting off the hook. And the easy answer here is just don't have those clients. But what is the underlying issue at heart? Like, what, what is it that differentiates that one client from the other client? And it is the degree to which they value the problems that you solve for Them when the problems that you solve are extremely painful, buddy, you can charge a whole lot of money. And usually the people who are complaining, it's just you're not solving that painful of a problem for you, for them. Or you're solving a problem that you know there's a lot of substitutes for. Why would I pay you $800 for this 1040 when I go to the guy across the street and he's only gonna charge me 400. Right. And there could be a whole ton of answers to that. You know, the difference in expertise and all these things, but your client doesn't understand that. And so when people talk about the value of niching down that really the core of that is being able to build a business around solving very specific pain points. And I think industry niching gets too much attention. The terminology I prefer is specialization getting more specialized. When you're working with a very specific type of person, a specific profile of person or business, odds are they share a lot of the same kind of common pain points. And those pain points can be your attractor to find more clients just like that. And right now, there are people out there in the wild for whom the problems you solve are twice as painful as anybody else on your client list who will happily pay 2x what you're charging anybody else. But the more specialized you get, man, the bigger that multiple gets. There are people with hyper, hyper nuanced pain points who will value you 10 times more than anybody else on the client list. You just have to have the expertise and the solution to those pain points that nobody else has. And oftentimes like the self limiting thing here is you're like, who am I to be able to do that for them? But we sell ourselves short. Oftentimes these aren't particularly hard problems to solve for us, especially when they come to things like, you know, compliance and tax rules and hiring people in new states and a lot of the things that we end up having to muddle through, we're like, who are we to be the solution to this problem when the issue is oftentimes who else is going to do it right and they don't even need to be accounting or tax problems. I would argue, in fact, some of the most meaningful things I've done for clients have really been in things that are like, not within my technical domain at all. But the more you can rally around those really painful things that a specific type of person has, the more you can build a more focused client base that will happily pay you a lot of money. To me that is the biggest driver in prices is the specificity and the level of pain they feel for the problems that you solve. So let's just run through a super practical example of okay, for a given niche. Maybe it's a niche that I have, maybe it's a niche that I want to go deeper into. What are the problems that they have and like, how can I build a solution for it? How could I market around that solution? How can I put that solution in front of existing clients to maybe get them to pay me more? How can I invest in, you know, I'm a big, I'm a big advocate of anything that we can, we can do to get away from trading time for money. So is there an asset that I could invest in that will work while I sleep that will solve this problem for people? Maybe it makes money on its own. Maybe it's a lead magnet to get people into becoming traditional clients at a higher rate than the people I have on the list right now. So as I said, this is a challenge episode. So we are going to check some stuff at ChatGPT and Brainstorm. What does this actually look like in the wild? Like, I think we can probably all agree on. Yeah, no, like makes sense the whole how painful is the problem thing, but like, what does it actually look like to put that to work in the wild? And this is one of the things I love ChatGPT for. It's really helpful for ideation. So I put this prompt into GPT 4. You are Entrepreneur GPT, a small business owner in a very specific nuanced niche. You always speak in the first person and adopt a Persona that would align with the type of business. Once we decide what it is that you run first, list 10 different niche small businesses that are very nuanced. So let's just find a type of business owner, a type of business to then go one level deeper into. What are the really painful things for that type of business? So first, some types of nuanced businesses. Okay, one handmade bamboo bicycle workshop. As the owner, I would be a craftsman who takes pride in designing and producing sustainable custom made bamboo bicycles. It really took the whole specific and nuanced thing to heart here. Now you don't have to stick to what ChatGPT says here. Is there something adjacent to it that makes more sense? Maybe you work with bike shops, right? Like maybe you work with bicycle shops and that's a niche. What are the specific problems that bicycle retail places have? Like, you know, online stuff eating into their business. Like, what are the specific problems to them. Let's cruise through the rest of these and just decide on a business then. 2. Micro farm for exotic mushrooms. Okay, maybe we went too specific. 3. Artisanal cheesemaking Studio cheese makers. That would be fun for tiny house Interior design studio. I guess that's a thing you could zoom out of that to just like interior decorators. Tiny home manufacturers. Tiny home Reese. Like the people who actually sell them. 5. Heritage Seed Preservation Store. I'm gonna be honest, I'm not the guy for that one. 6. Upcycled fashion boutique. As the owner, I would take previously used or vintage clothing and revamp it into trendy, stylish pieces, contributing to the sustainable fashion move. I like that one. It wouldn't even necessarily have to be fashion. It could be furniture. I actually feel like that's a growing trend right now. Like kind of the anti flat pack or anti fast fashion sort of retailer. Right? 7. Dedicated vinyl record cafe. Yeah, I don't know. 8. Custom board game workshop. Okay. Design and craft personalized board games. That's very specific. Maybe like board game board game retailer or maybe online DTC board game retailers. Board game creators. It'd be an example of like a fun one. Like if that's something that you're super into, man. Like that almost wouldn't feel like work if your job was basically to meet all the people designing cool new games. 9. Robotics Learning center for seniors. Tell me more. Here I would be an instructor who helps older adults learn about robotics and technology. Boy, I got no idea what that is, but I'm fascinated to learn. 10. Therapeutic horseback riding services. These are very specific. So if you zoom out a bit there. I don't know, maybe it's like horseback riding services or any horse based things. I think my favorite here is probably six. Upcycled fashion boutique. And it wouldn't even necessarily need to be fashion, but kind of the upcycled retail thing in general. I don't know, maybe it's helpful if we keep specific on the whole fashion thing. This episode is sponsored in part by the fine folks at Cloud Accountant Staffing. Do you hire accountants? Bless your little heart. Not the best part of the job and in my opinion, not something I ever enjoyed. Well, listen, you can build your accounting dream team with talented offshore accountants in the Philippines that work 100% full time for your firm. Their accountants aren't freelancing or contracting for multiple firms. They're all yours. They work exclusively for you and are incentivized to stay with you and your team long term. They're not gonna get swiped. Cloud account staffing is 100% dedicated to the accounting industry and founded by a former accounting firm owner that understands your business, knows your pain points. They had to hire some accountants and they said, you know what, we're gonna build our own pipeline in the Philippines, gonna pull in some super talented people and then open that up to other firms. Basically that's the story. We talked a lot about staffing, building more resilient staffing pipelines for your firms. I had staff in the Philippines totally red pilled me to like oh geez, like we need to globalize the the way that we get our work done. Check these folks out Link in the show description cloudaccountantstaffing.com this episode is sponsored in part by Xero because Xero's Roadshow is coming your way, buddy. July 27th in Austin, August 3rd in Atlanta. But August 17th Los Angeles in California at Valentine DTLA. Hang on. Googling oh that is nice. Okay, if you've ever been to a zero party at a conference or anything like that, you know these folks know how to put on a real nice event. How's 6 hours of CPE sound? How's hanging with a bunch of other forward looking accounting practice runners sound? You're even gonna have some people there from like the app ecosystem. You know, the people that make the fun little tools you use. I've done some roadshows before. Pretty solid. I'll put a link in the show notes to register. If you're in the Los Angeles area or if you're anywhere by an airport cause there's an airport in Los Angeles. Get on down to the Valentine DTL. That must be downtown LA, huh? August 17th. Get some CPE and have some fun. Okay, what are the problems that this business owner has running this type of business? All right, here's the follow up prompt I've got for ChatGPT. Now adopt the role of number seven, a small business owner of a boutique upcycled clothing retailer. What are the very specific problems you face running that type of business? They could be operational software problems, data problems, financial problems. The more nuanced and specific to this type of business, the better. Briefly list 10 problems in a conversational tone. Okay, so goal here. Find a meaningful problem for upcycled fashion boutiques that we can build marketing around that we can build solutions for that ultimately increase the value of what we do for our clients. So with the end goal being that we're going to charge more for the stuff that we kind of already do, but with a slightly More specific kind of spin on it. Okay, buckle up. We're gonna bring our entrepreneur to life here courtesy of ElevenLabs. We're gonna run through these 10 problems.

Sure. I'd be delighted to share some of the challenges I've been facing as the owner of my upcycled fashion boutique. 1. Sourcing quality material. One of the main issues is finding the right materials to upcycle. Not all used clothing is in good enough shape to be reinvented into a stylish piece, and sifting through tons of clothes to find the gems can be quite a task. 2. Consistent inventory unlike mainstream retailers, I can't just order more stock of a popular item. Each piece I create is unique, which means my inventory fluctuates a lot and I have to constantly be sourcing and creating to keep up with demand.

I don't know how to solve that one.

3. Design inconsistency because each piece is one of a kind, it's a bit harder to establish a consistent style or brand image compared to traditional clothing lines.

Okay, so first problem, sourcing quality material. Second, consistent inventory. Third, designing consistency. Maybe there's a way in. I'm having a hard time thinking through how I could solve any of those.

Let's keep going through these four pricing challenges. Determining a fair price for each piece is a bit of a balancing act. I need to account for the time and effort I put into creating each item, the cost of the original clothing, and the market's willingness to pay. 5. Fast fashion competition Fast fashion retailers can sell brand new clothes at incredibly low prices. It's hard to compete with these prices when my materials and production process are more costly.

6.

Lack of design software. Most clothing design software is aimed at large scale production, not one off designs. I often have to improvise with what's available.

Okay, so four is pricing challenges. Five is fast fashion competition. Six is lack of design software. There's a ton of like fodder here for blog posts that sort of thing to like build content around and none of them yet feel like super adjacent to the problems that we solve. But one thing to keep in mind here that I think we often forget, we are a hub for a very specific type of person. Like if you have a specialization, even if you're still in the process of building it, you don't have a ton of those clients yet. There aren't many places that are an ongoing collection of such a specific type of person and there is a tremendous amount of value and you simply being the hub of you being able to connect those different people. So some of the other issues she's referenced sourcing, quality, material, consistent inventory. These are problems that every single one of these people have and is even a barrier to people probably going into this business. And I would encourage you to even think about, do I have to be the one to solve these problems for them or could I just be the one to bring them together? Like, that's another interesting angle here. Like maybe you're putting together mastermind groups. Maybe you're running a little community where these people can help each other even though you are not solving their problems. The interesting thing about being the hub is when you make a meaningful connection, the value of it is attributed to you. Even though you're not delivering the value on an ongoing basis, the value is that you got them into the room and they're all learning from each other. We got four left here. Hopefully one of these feels, I don't know, a little more like direct to something that I could help with. Ultimately, I want to get to where there's like, is there a free kind of giveaway product I can give that solves this problem? Like, what is the cornerstone thing I'm going to talk about when I go on a podcast that these people listen to that sort of thing? 7.

Environmental impact awareness. Educating customers about the environmental benefits of buying upcycled clothing can be a time consuming process.

8.

Physical space requirements. Storing used clothes for future projects takes up a lot of space. I've had to get creative about storage solutions.

A lot of great things here that if opened up to a community, folks could learn from other people doing the same thing. Okay, we got two more here. And then we'll decide which of these we really want to double down on.

Nine. Time intensive process. The process of transforming a used item into a stylish quality piece is time consuming, which affects my production speed. 10. Regulations and compliance. There are specific laws and regulations related to the sale of secondhand clothing, and compliance can be a bit of a bureaucratic hurdle. Not to mention, each area or country has its own regulations, which complicates things if I want to expand my market.

There you go. Bada boom, bada bing. The 10 things you need to know before going into business selling secondhand clothing. You know, all the things that people got wrong or the regulations that they weren't aware of. That is an absolute goldmine of a problem that you would be so well suited to solve. Not only because we can go out and do that research once and then build assets that are reusable and can add value to people a bunch of times over, but because you see into the dirty details of all the people actually doing this stuff and in a way that nobody else does. So when a client gets in trouble for something or there's some regulation that they weren't aware of, man, oftentimes we are the first ones to find out. And they don't go out and talk about this stuff. Like, they don't go share this thing, this stuff publicly. Even if they have a network of other people that do this stuff, most of them are gonna keep it to themselves. But you see all of this, you're the bottom of the funnel of, like, all the crappy stuff that happens to your clients that somehow we get recruited to solve, right? So who's better suited to, like, how best to navigate these regulations? And it ties in really easily with tax regulations, with how your books need to get put together to make good decisions and for tax purposes and all of that. So this is a killer problem to solve, like, for us to solve, I think. And so how would you go about putting this out there to attract new clients and to get your existing clients to pay more? Let's do those one at a time. So to attract new clients, one thing that pretty much every firm ought to have right now is a free resource on their website that gets their email onto a list, and we overthink what this has to be, and then we have to invest a whole ton into it and spend all this time and make it pretty. And you don't like, the reality is you've got more value, like, bouncing around up in that noggin that you're not even thinking about than, like, you really realize, so what's a version of this that you could put on your landing page that's like, hey, here's the top three things, and here's this really quick and easy resource that you can get your hands on to make sure you aren't screwing this up, right? Like, that's a really easy thing you could put on your landing page. And you know what? Gosh darn it. We've talked so much about the really sad, homogenized state of accounting firm websites, buddy. This is better. This is so much better. When they are shopping around different accounting firm websites, you're immediately gonna look smarter than, I mean, everybody. Like, how many people are going to have a resource guide for navigating regulations and compliance for upcycling retailers? Not many, right? So when they find you, even if they already have an accountant, the difference here is trying to figure out how in any way, you're different than every other accounting firm versus getting to your landing page and being like, holy smokes, I found the person for me, finally. Like, whether they've had an accountant before, whether they have one that they're not super happy with, which is, I think 80% of people, they're gonna jump ship. Like, that's the value of specificity. And when they come in, they're coming in at a level that is completely different than the level they would've come in at if that was like, a boring, homogenized website. If they come into that boring website, they're benchmarking you against everybody else. There's tons of substitutes when they come in. And you have that, like, very specific thing on your landing page where they're like, oh, my gosh, this is for me. Set your price. Like you're one of one at that point. It doesn't mean they're going to be able to pay it, but you have, like, total autonomy to set your price where you want to set it, because there's no substitutes. Now you got to back that up with, like, meaningfully solving those problems. And for many people, especially people starting out in this industry, this could be a problem that legitimately prevents them from starting that business. Now, you, as the bottom of the funnel of all of those things that have gone wrong for your other clients, you can frame in a helpful way, like the cost of not being compliant. And you can even include that in kind of your resources. Maybe there's some interviews with your clients where they share some of the stuff that they got wrong and how they could get out in front of it. And before those clients have even come in the door, like, you have delivered value to them that no other accountant would have delivered to them. Now, how do we capitalize this on an ongoing basis once those clients come in the door and to increase the value you're providing to the clients you already have on the client list. We talk recently about how to sell app advisory and how as part of every engagement, you could have this sort of annual check in that comes with this report delivery of kind of, here's the state of your apps. Any recommendations that we have. You could absolutely do the same sort of thing for regulatory compliance with this type of business. If there are a lot of these hurdles to manage. Every year you do kind of a review of how are we doing on this stuff. Like, are we on top of it to the degree that we need to? You don't need to overthink it. Maybe it's A live meeting once a year. Maybe it's not. Maybe it's something that you can infer from just the access that you have to how they work. And then at the end you issue like a one page report and you're like, you send that to the client, you say, here's where we think you are right now. Here's any recommendations for remediation if it's necessary and how we could help you. And you're charging for that. And that's part of, you know, if you got them on a fixed monthly fee, that's part of the fixed monthly fee. Maybe it's a once a year fee that they're going to pay. And honestly, like you can even make it totally mandatory. You've got this $800 a year thing where you can run this little analysis. You can run it with honestly, probably the junior members of your team and they can issue the report because it's done to like a specific standard. You have kind of a standardized process that you use for all of your clients. And even around that you could build reusable resources, like deeper dives into what are each of those things that you looked into. And those resources are available every time that you issue the report along with maybe a update of like new Stu that's come out. Honestly, maybe 800 bucks a year is even underselling that. Or maybe you've got it tiered according to the size of the business, but a pain point that is specific to this type of client, regulations around secondhand sale of clothing, that's like kind of exactly what I was looking for. And I think and this is just one type of pain point for this client. Like other stuff that it brought up was like, you know, software specific to our space and getting reliable inventory and all these other things. And it's not to say that you need to just stick with one problem, one kind of core problem. But most of us I don't think have even started this. And I would argue like even me running firms up to the end of last year we kind of had specializations and we just knew stuff because we worked with a lot of a certain type of client. But we never got so specific as to hone in directly on here's a very, very specific problem that we need to talk with everybody about. Maybe the closest we got to that was like ERC for dental clinics because we were doing a ton of that. But if you don't have this out there already, you don't have the assets like that you're using for marketing and all of that for upselling existing clients, you need to start with one really painful thing. And that can kind of become your cornerstone thing that you use to go out and speak about what your firm does. If there's a podcast out there that a whole bunch of retail apparel upcyclers listen to, you want to get on that. And if you reach out to the people that run that podcast and you're like, hey, I'm an accountant, they're going to be like, cool. If you reach out and you're like, hey, we do this deep dive on regulation for our clients and we will share the process. They'll be like, amazing. When can you come on? They'll love that you go out there. You don't need to be afraid of spilling the beans and giving away the secret sauce. Like, do not let that limit you. And then when those clients find you, they come back around. You are so far elevated relative to how clients come in today. Like, they've seen you. You're that one person out there who has obviously already been established as the expert, because this podcast host that they listen to that they're impressed by says that you are an expert. And when these people come in the door like, this is not at all an exaggeration to say that you can do the same work and charge twice as much as you do before as you did on your generic work or even the work for the same type of client before you got more specific about how you solve their pains. It's one thing to do accounting and tax for a specific industry. It's another thing to go a step further and say, what are the most painful problems you have that we can help with, even if they're like a little outside of that accounting and tax domain? Hey. This episode is sponsored in part by Canopy, the practice management system. Canopy unlocks the firm that you always wanted. Think about it. Close your eyes, lean back in that chair. What is the firm that you've always wanted? Oh, wait, Canopy unlocks it. And they do this by unclunking accounting firms with an end to end solution that makes your tech stack feel a little less stacky. Because it's end to end. Putting our customers first with world class user experience, support, education and innovation rooted in customer feedback. Working and working well anywhere and for any size or type of firm, wherever you are now and wherever you're going, multiplying your efforts so your practice requires less proverbial midnight oil, you know? Sidebar. If you go to the conferences Canopy's got, like, they always do some like really good little like sorta, you know, the stuff that they use to like trick you into coming to the booth. Well, this year they've had like Legos out there. Maybe, maybe a double down on the midnight oil thing. You know, maybe like, I know, give away a little. Little, you know, little actual midnight oil. I guess it would need to burn too, but that one's free. I think it's a good idea delighting your clients with a modern, easy to use portal that helps you get the info you need when you need it. That is kanopy. Check out the link in the Show Notes to learn more. This episode is sponsored in part by clienthub. Come on in. Recently on Tails from the Hub, the team at super smart accounting firm adopted Client Hub. And recently I talked about the trade offs of optimizing for the firm experience versus the client experience. You may have seen some discussion on that super smart accounting firm. They were thinking along the same lines. What they ultimately decided they needed an option that optimized the client experience, that exchange of information. They chose Client Hub because it was designed for an amazing client experience and their clients love it. They love the mobile app, they love the intuitive interface. Even better, client communication is no longer scattered all around and siloed email inbox. It's all in one place. Everyone describes ClientHub as simple, intuitive and efficient. Everyone. Ask anyone. That's what they say. That's the magic client hub and it transformed this firm, buddy. This year they are raising prices because that client experience is off the charts and everybody's tickled about it. They love it. They just, they're having so much fun. Sounds good, right? Right? Hey, that's it for this week's tales from the Hub. Check out Client Hub at ClientHub app or the link in the Show Notes. Hopefully that was helpful. I think it's as we're talking about pricing and all of that and we need to increase our prices, I think it's always worth considering. You do need to keep increasing prices, but at the same time, I think you need to keep finding more specific and more painful problems that you can solve for that will enable those price increases. I'm kind of enjoying these challenge episodes as a way of like practically thinking through one of these things in the wild. One of the most helpful things for me in running my firm was when I was able to put on my kind of advisor hat and look at another firm through that sort of advisor lens and be like, how would I help them to get over this hurdle when oftentimes There are hurdles that I'm stuck on too. But when you're able to see it in somebody else's firm, it kind of turns on a different part of your brain. And I think these exercises kind of kind of help us do that. And then when we go back and look at our own firm, I think it's a little easier to put together those practical solutions for where you're at today and have a better framework for how to solve more specific problems going forward. Was that helpful? I think that was pretty fun. If you've got any, like, gold specific problems you've stumbled into, those nuggets are, like, glorious. When you find those and you realize, oh, man, we can actually build a really compelling solution for this. I think I shared before. One thing we started doing for Dennis was the cash reconciliation. What goes into the practice management system versus what comes into the bank. We realized none of the dentists want to give their admins banking access, and none of them are going to take the time to reconcile what goes into the practice management system payments with what comes through the bank. And that was like a really easy thing for us to do. And we could charge a bunch of money for it because it was the number one source of theft. And when we had that light bulb moment, we're like, oh, dang, they're going to love this. We rolled it out, we said, hey, we're gonna do this now. And like, half of our client base took us up on it. Was one of our most profitable things. So have you stumbled into any, like, killer problems like that that you solve for your clients? Please drop them in the comments if you have. And thanks for coming and hanging today. This is fun.