115 How To Double The Prices in your Accounting Firm

In my hand is a 100, $100 bill. If you're listening to the podcast, that's $100 bill ASMR for you. What would I need to do to get somebody to pay not $100 but $200 for the same thing? It's a really helpful exercise to back into who are the clients and the services that I need to double down on without doing more work. That's not the goal. I don't want to do more work. I want to get paid better for the work that I'm already doing. We're going to run through this exercise. I'll talk through some traps the way I see it done wrong. And then we're going to use AI to do a really practical example of what this would look like in a firm. So come on in. By the end, let's try to double your prices. How's that? How's that for an ROI on this next 30 minutes, Back from New York. Oh my gosh, I flew out of there. If you saw the flooding from last, what was it, Friday? Literally flew out the night before. That was a close call, but was hanging in New York at the AICPA Executive Roundtable. A lot of like, C Suite folks from all of kind of the big vendors in the space, many of whom listen to this podcast. Very flattering. But it was a great idea to chat, to chat with some of those folks and share ideas and all that. So how to get people to pass more. I just, there's just a lot of, I don't know, advice on all of this stuff that I don't agree with. And oftentimes the value discussion and the advisory discussion and all that is put out there through the lens of frankly selling you something, be it coaching or a software platform or something like that. So. So I wanna drill down on the best of that and what is, to me, the most simple exercise you could do either by yourself or with your team to just in a really constructive way, figure out how to get more for the work that you do. Not in a skeevy way, like, I think I know. I used to be like, well, I don't wanna be astronomically priced and like, I didn't identify as somebody that would do that. I wanted to be the everyman and not charge too much. But, but to be clear, we're not like robbing people. We are being more aware of what the most valuable things that we do for people are so that the folks who are paying you those better rates are still thrilled to pay you those rates. So good ways and bad ways to go about this. In general, the discussion is almost always around adding more value, which is great, like we should, like, how do we provide more value for what we do. But unfortunately, this is often misconstrued as just doing more work or adding, you know, CFO style advisory and that sort of thing. And I can tell you, in my experience, what that usually looks like is actually piling more work on your most finite resources, your most technically capable team members, and man, those are the people who are spread the most thin right now. So if your roadmap to adding more value is adding, say, fractional cfo, but you don't have a clear plan for how to upskill people on your team to do that so that you have more of those folks that can do it, in my experience, it just ends up putting a bunch more work on your shoulders. So what I get most excited about, and there's a hundred scenarios where that's a good idea where you should do that. So, like, I'm not blanket saying you shouldn't do advisory or something like that. What I am saying is the best case scenario, something we should all be trying to do, is figuring out, okay, for the stuff that we already do, that we already have the people to do, that we have the expertise to do well today, how do we just get paid better for it? That's a win no matter what. I recently there was a tweet from Michael Gurdley on Twitter who said an indicator of a good business is that you could increase prices and not be especially concerned about people leaving. I don't know if that means you have a good business or if it just means your prices aren't high enough. But this made me think in a deeper way about kind of what we're talking about. And I think one way to back into figuring out, what is it? Like, what could you do differently right now that would make people happily pay 2x what they pay today? One way to sort of back into figuring that out is considering who it is on your client list that you're pretty sure would pay way more. So myself, you know, if I've got a list of a hundred clients, I always kind of knew the people who were jazzed about us, who you could probably increase fees quite a bit and they would still be perfectly happy. And so if you can go through your list and think about those folks, and I'm sure a few probably came to mind, consider why and then consider how scalable that why is, because you probably have people that came to Your mind, who are thrilled because of you, because of how much of your attention they get, because you respond to their texts, because they love your personality, whatever it is. That's an example of a why that to me is not scalable as opposed to a why that is something like they had this unique problem and we may have, maybe we even struggled with it for a year, but then we found this killer solution and now they love us as a result. In fact, talking with a buddy recently, and there was a niche that uses this proprietary niche, like specific software platform that they just really didn't like and there wasn't a good way to get this information back to qbo. And they struggled and tried to support this niche for the like a year and a half. In fact, on this niche software platform they had featured accounting partner vendors and their firm was like the top one there. And so they were getting outrageous numbers of referrals from this platform of really good high paying engagements. But they just absolutely could not get this integration thing figured out until one day, one way or another, they figured out like, okay, like this is the way to do it. And the team was then super confident on whenever somebody comes in, like, we now absolutely feel like we're the wizards. And it went from being something that was a really hard problem to solve to like, oh, now we've got this. And this is actually now our secret sauce. That is a great why. So if somebody wants to pay you more because. Or if somebody values more because of that, that's a killer why? To build around. Because that is organizational expertise. It's not because Bill likes you. Right. Like that's oftentimes what we build our businesses around when that is a very finite resource. So when you're looking at those clients that you know will happily pay you more, consider what it is about them that will make you pay, make them pay you more. And it could be a combination of a bunch of different things. It could be their income level, it could be how much money their business makes. I mean, a very real factor in any of this stuff. There's always an element of framing ROI and how we set our fees. And the less money a person or a company makes, the harder it is to make that ROI argument. So if you have a business that's a $5 million business instead of a $50,000 a year business, if you're going to do tax planning or solve an accounting problem or something like that, there's just a very different inherent level of value strictly from their size. So those are always really big Factors. But. But there's also gonna be a lot of stuff, like things that are unique to them, like painful past experiences. Maybe they had an internal person who tried to do this thing in the past, and it was a total dumpster fire. Right. This is one thing that's really hard with new entrepreneurs is they don't yet know the pain and the price of getting it wrong. And they come to you and you may do a great job, and they're like, why is this so hard? And you're like, yeah, no, sorry, I don't make the rules. As opposed to that client who may have gotten totally burned. Or like, I mean, we always. We had a dental client who had tried to do all this stuff in house for, like, two decades, and they finally found us and they paid us really well to do this stuff. And they're like, she's like, where have you been all of my life? This is so much better. And like, that was the person that was always sending us the biggest gift boxes every holiday and all that stuff. And she absolutely loved us. And the reason was she had this painful past experience where they got it wrong and so forth. For me and for, like, a firm strategy, that's a signal to say, okay, maybe we go out and we actually market to dental practice managers who are doing in house accounting. And you know what I would do is I wouldn't say, does your practice manager suck at accounting? I would build a course to show practice managers how to do accounting. Because where that ends, 80% of the time is you actually show them a bunch more nuance that they weren't even aware of, and then they just have you do it. But, like, think about what that pain is and what the hook is to then find more of those people. 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, in my opinion. Not something I ever enjoyed. Well, listen, you can build your accounting dream team, 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. I've been talking about a lot about staffing, building more resilient staffing pipelines for your firms. I had staff in the Philippines like totally red pilled me to like, oh geez, like we need to globalize the way that we get our work done. Check these folks out. Link in the show description Cloud accountantstaffing.com this episode oh this episode is sponsored in part by accountests. You know what, I don't enjoy spinning the old wheel of does this person I just hired know what the hey they're doing? Because I can tell you that more times than not, the answer was no. Because how in the world do you actually figure out if this person can be productive based on, I don't know, a resume based on the firmness of their handshake? You can't. But account tests, it's going to give you a little more information than you had otherwise. So count tests is a super duper simple way of doing skills testing for the people that you're going to hire. Basically generate a link. You can run them through these skills tests. It's nothing super sweaty, but you know what it is is information. Information that you wouldn't otherwise have unless you sent them this little quiz. They got tests for accounting stuff for Gap stuff for tax stuff. Whatever you're hiring for, they probably got a test for you. Super cost effective because let me tell you, it is a whole heck of a lot cheaper than hiring the wrong person and then training them for months and then realizing I have made a huge mistake and we just wasted months of our time with the wrong person. Boy, do I have a whole closet full of those T shirts. So that's something that keeps you up at night. Check out account test. We'll put a link in the show. Show notes unique compliance challenges for their biz we did a past exercise with AI where we were looking at a just like some micro niche businesses that you could build a firm around and we got to what's it called, Upcycled clothing retailers. And one of the examples AI threw out was unique compliance challenges around upcycling apparel. Great. That has nothing to do with accounting or tax. But we see where everybody gets in trouble and the folks that own these companies, they're not doing their signaling on social media about the ways that they got in trouble. So. So like we can do marketing, we can be a killer solution for like hey, here's all the regulatory stuff to look out for. It could be tax, it could be accounting, but it could also be totally different stuff. So those are compliance challenges unique to those people's businesses. That's a great pain point to be a solution for that will make people be willing to pay you more. Unique accounting classification needs. You think of stuff like, you know, Web3 stuff. Obviously that's a mess. Unique data integration complications. That comes up a lot in E Comm. How you present the service. I had people who were just. In fact, I had a couple creative agencies who were blown away by me delivering stuff over video. I don't know if they're just more visual people or what, but they assigned actually a big premium to that. They loved that. So the way that you present your services, I always say that like I think a rad tax firm is one that is like seasonal and just turns up at their retirement home and like does all that stuff in person with all those people. Like I love firms that know what they are and will meet people where they are. I not super into the general. Like everything's gotta go online, everything's gotta be this or that. Like it's very hard to have any maxims that really apply to every type of client. Just know who you are and build the best business for that type of pain point. So consider if the reason that that client loves you has anything to do with the ways that you're willing to work with them. And at the end of the day it could be a combination of a bunch of these things, right? And even the best, most specific opportunities probably are. It's probably a combination of another thing, of a number of things. It's not just beekeepers. It's probably beekeepers over a certain size who have this, you know, specific challenge. Like it's probably a combination of a number of those things. And when you're assessing those pains, the way I would think about it, we talked a little bit about this, but like to get a little more explicit on this, the way I think about the value of those pains is, is putting them on like a two by two spectrum of how painful is it? Because there's stuff that's outrageously painful and maybe that's hard to solve, maybe it isn't. And then there's stuff that's like, yeah, it's kind of painful. Like if you can do that for me, fine. Like I've shared the example of the struggles that we learned that dental clinics have with reconciling deposits. You have this practice management system with all the Patient information in it. That's where all the deposits get put posted because they do the invoicing out of there. But none of that ever goes to the accounting system because you're not going to put patient information in there. So then ultimately who makes sure that what comes through the bank is what was posted to the practice management system? You don't want to give your practice manager banking access. It's a massive waste of the dentist's time. We found out that we could do this, coming to do this in a pretty automated way and it solved like the number one cause of theft, like it was a killer solution for their specific need. And so if you have this sort of two by two grid of how painful is it? The other index for me is how much is it reliant upon like our most limited resources, like our highly technical people. So I would put that on a spectrum of either how automatable is it or how offshore is it, or admirable if you don't use offshore. And I kind of had that just in a single, I guess, vertices, vertex, the Y axis. If it could be automated or offshored, it was high, if it couldn't, it was low. So advisory, you know, cfo for me, that's pretty low. Yes. There's a big spectrum in how automated and how down the skill spectrum you can make advising, you know, how accessible you can make that for the rest of your team. There's definitely good ways and bad ways to do that, but fundamentally that is a harder thing to scale. But the example of reconciling cash, like we figured out some pretty darn cool ways to automate that. And 100% of that could be done by admins. And so we love that. And it was a pretty painful thing for dentists. A lot of dentists just weren't doing it and so maybe they did like they were like the ones who weren't doing it to begin with, they're like, well, I've gotten this far. Ones who have been stolen from, they're like, yes, please, like I want this. So it was pretty painful, but we could totally automate it and we could totally get admins to do all the heavy lifting. So that was a pain that was a good fit for us to double down on because people would pay to top dollar for it. So I would, I think of those pains kind of on that grid and literally the, the X axis is how painful is it super painful or not that painful? The Y axis is can I either automate it or have an admin do it? And the bad end of that spectrum is does it require me, like that's the worst case scenario or the most technically capable people on my team? And so if you're actually going to go through this exercise of thinking like, who are the clients that love us? And then making a list of why they love us, you could take that a step further and like map those pains on that two by two grid to get to like, what are the kind of the best opportunities here? Demographic type things obviously don't really work in that context. So if they are coming to you because of their income level or something like that, that doesn't make sense. But if you think about, I guess, the combinations of factors for those clients who love you today, you, you put that on a grid and say, like, how realistic is it to think that we could do this for 100 more people? That's kind of my litmus test for like, what's a great opportunity, a great pain to build marketing around? And what is something that is just like, Steve likes me and that's why he's gonna stay, that I don't wanna keep building a business around. Not that you shouldn't have people try to like you, but those are the people that as soon as you peel them off of you, are now unhappy or a lot less happy than they were because the reason they're there was you. And ultimately the more you can, I don't know, make that value be less about specifically you and more about the business, the organization, like organizational expertise, the better. Okay, so a cool exercise I think we can do here with some prompting and ChatGPT to give us some examples of pains and kind of open our minds to different types of pains that clients have so that we can also think through the exercise of is this something that can be automated that an admin can do and is it like traffic? Truly super painful. So I've had ChatGPT generate some micro niches for me. A bit of prompt engineering advice here. It's hard to get ChatGPT to go as specific as I want. So for example, when I first prompted it for micro niches, it was like E Com, trust, accounting and tax. I'm like, that's not micro niche. And I actually asked it, I said, how could I have changed my original prompt to get down to stuff that's, you know, even more specific? This isn't specific enough. And it said, give me some examples. And that's actually great advice. Anytime you're working with a large language model, if it's not giving you what you want in return? Give it a few examples and the performance will be way better. Hey, let me just record this podcast. Not I can't because my computer's broken. It isn't really broken, but if it was and I was in an accounting firm, you know who I call Tech Guru. That's right. This episode is sponsored in part by Tech Guru IT for accounting firms. Because you got better stuff to do than fix your broken computer. Now if you don't have a partner yet for managing this stuff for you, buddy, I don't know what to tell you. You're doing it wrong. And the nice thing about finding a IT group that works specifically with accounting firms is they understand like the actual tools that we use. When you show them your tax software, they're not like, what is this absolute poc? I spent myself a lot of money training non accounting firm IT groups on how to understand things like CCH engagement. Whereas if you go to a group like Tech Guru that actually works with accountants, they already understand this stuff. They know to leave UTF alone during busy season. And so like the cadence of how they plan and strategize with you is actually catered to your firm. And like the cycles that your firm goes through, check out Tech Guru. Put a link in the show notes cause you got better stuff to do. Okay. This episode is sponsored in part by Copilot. Okay, everybody gather round. Take one another's hands. Now we can all agree the way that we exchange information with clients, Very important, can be a massive time waster if you don't nail it. But I get it. The fear of training clients on a portal system, right? What if you end up not liking it? What if you train a whole pile of people on this giant system and then you're like, turns out this actually isn't the one for me. Or this new super cool AI rocket ship platform just took off and now I gotta get all my clients to move. Here's the thing. That is the best argument for why your client portal experience ought to be separate from your workflow management tool. You getting what I'm saying, Copilot? Man, all they want to touch is that client experience. Just the portal giving you a mega flexible platform for how you want to work with your clients. So that if the workflow stuff changes, if you want to pull in a different tool for that, you can without changing the client experience. Pretty smart. Especially in these scary changing times of AI. Right? Right. Actually got a demo day coming up on the main YouTube channel from Copilot in the next week. Or two where we actually get hands on with it. You can see see even even more about it. If you're looking for a cool modern client portal experience, check out copilot link in the show notes. So the prompt I ultimately ended up using in ChatGPT, this is on GPT plus we're using the GPT4 model. I said I'm an accounting and tax pro. Generate a list of 10 very specific micro niches I could support. For example not e commerce but something specific like apparel printing, E comm or not retail, but bike retail. So it gave us a list of 10 niches. Online subscription box services for fitness influencers and coaches, artisanal food producers, self published authors. These are all killer. These are really good like micro niches. Some of them could maybe be a little more specific still. But I love these app based gig workers, digital art and NFT creators, indie game developers, sustainable fashion brands, tech startups focusing on AI and remote learning platforms. That's interesting. So under each of these it says a little bit about that, more about that niche, but there's also a section for needs. So for example under remote learning platforms for needs it has subscription revenue, international tax considerations and educational credits slash grants. So all these people have their own very specific problems. Right. So let's drill deeper on one of these. I hope you can hear all the all of the scooting that's happening above me. In fact you'll hear this even in my main channel videos lately. So I work in a workshop off of my garage. It's not impressive. The field of view you see right now, it's great. Everything beyond that it's not. But I'm actually right below our living room and kitchen and my 2 year old has this plastic shopping cart and he just likes booking it up and down the living room tile which so it's like tile and it's got all these seams and he's just got this plastic shopping cart that he's just going ham with all day now. And you can totally hear it in all my stuff. Okay, so we want to drill deeper into one of these micro niches to get into more specific problems that they have. So here's the prompt that I gave it and I'm specifically going to drill deeper into number seven indie game developers because that one was still a little vague. I said for number seven, give me 10 very specific to the business pains they feel around systems, data integrations, cache management, cyclicality, software regulation, accounting and people management. So gave me 10 things. Number one, systems complexity, the need to integrate various systems like game engines, asset stores and collaborative tools. I don't know that I'm going to be the helper there. Number two, data integration challenges. They must use multiple platforms to sell and distribute their games like Steam Itch IO Epic Games Store. Man, that's a killer one for accounting firms just to know the nuts and bolts of how selling on those platforms work, how money comes through, how to classify that stuff in the accounting system. That's actually a really good one. Cash flow management is number three pain. Due to the project based nature of game development. Cash flow can be unpredictable. That's a killer one. Like how do you. That's that's to me like seems like the hardest part of running a game studio is you have these big projects that lead to shipping something and you hope they're popular but every single one of those things is a huge bet and you may have a hit on your hands and the company grows a bunch but then maybe the next game ships and it's not that popular. How do you build a business around that level of uncertainty and manage cash over year long development cycles? That's totally something that domain, you know, specific expertise would help with. Number four, cyclicality and seasonality. Sales for games can be highly cyclical with peaks during launch sales events or holiday seasons. And a cash flow planning app is going to be gold here. Right. 5. Software licensing and expensing. Acquiring and maintaining licenses for game engines, asset packs. That's not really us. 6. Regulation and age restrictions. Different countries have varying regulations around game content and game purchases and age restrictions. There's an element of international regulation there. I don't know how helpful we would be with like the regulation around the age stuff, but definitely navigating, taking payments internationally and like all the various platforms around the world. Because like Steam for example, people are not only buying your game on Steam in the US they're buying that everywhere. Right. And so what are some of the nuances that go into that? Number seven. Ooh accounting for in game transactions. Many games have microtransactions in game currencies or DLCs which add layers of complexity to accounting. Bless the hearts of whoever's managing that stuff right now. These are killer very specific things. 8. Managing remote teams and board desk to general. 9. Intellectual property concerns. Protecting the IP of the game, especially in a space where assets can be bought or are open source. Yeah. Specifically what does that look like for accounting? 10. Talent management and turnover. Eh, everybody's got that problem. So where do these problems fall on that? 2 by 2 spectrum of how painful they are and is it something that you could automate and. Or have an admin do? So handpicking some of my favorites here that are most relevant to us. Data integration challenges. Indie developers often use multiple platforms to sell and distribute their games. I mean, this is just like the example we were talking through where you're looking at a niche and you get in and you're even a recommended, like recommended accountant by the platform because you understand how to integrate this stuff. That's absolutely an organizational skill set. Like, that's not because Steve likes me. That's, hey, we've figured out this system now internally. We know the tools we use to get all this stuff into the accounting system the right way. And that might be a really hard thing to figure out. In fact, it may even be a good thing if that's a really hard thing to figure out. Like, that's a little bit of a moat for any other firm who randomly picks up one of these clients to come in and just do a couple of them. You want this stuff probably to be hard enough to where that other firm's going to be. Like, I'll happily refer this out to somebody else who has figured out this nuance. And that is, honestly, that's like a triple A opportunity to me because it's organizational knowledge. It's not specific to you. And integrations ultimately are more data problems, not accounting or tax or something like that. And I can get admins, I can get people to manage data problems for me that don't have to have a massive level of expertise. Cash flow management and cyclicality and seasonality. Let's roll those together. That I can imagine is a hugely painful thing for game studios, but how easy is it to automate or delegate to an admin? I will say reporting tools here are a massive help. And simply getting them going on a reporting tool is not a hard thing. It's not a big lift. And these tools are getting so good that they can look at past patterns and like what the drivers for income and expense are and project that stuff out in a really helpful way. So. So it's not necessarily to say that that is hard, but it is further down the spectrum compared to data integration challenges. Right? Data integration challenges is something that once you figure it out, you've got it. Cash flow management, there's a little more sorcery that goes into that ultimately. I think now, again, there's a huge spectrum in how systematized that is. There's a freewheeling version that requires a Whole bunch of brain power and there's a much more locked down version with the right tools that require. Requires much less brain power and you should lean into that. But just be mindful of the fact that while this is gonna be really valuable, it's still fundamentally harder to scale. Doesn't mean you shouldn't do it, but it is gonna be harder to scale in game transactions. I love that one. That feels like an organizational knowledge sort of thing to me where with the right software in place, it's gonna do it right and isn't gonna be, isn't gonna require like your secret sauce man. That was a fun exercise. Hopefully that was helpful. I've actually been really enjoying using ChatGPT to generate examples because I don't know, I don't know about you, I'm, I'm tired of slide decks and speaking in the abstract about this stuff. One of the things in my, in my online community that I've enjoyed the most is like actual coaching of a real life situation rather than speaking in the abstract because that's where you can really get into the nitty gritty and the nuance and the human problems related to like. I understand in theory that this is best, but when it actually comes down to the people involved and the clients and the staff, what makes the most sense. This has kind of been a fun exercise for me and I would love to get your feedback to actually like paint the picture of a hypothetical client profile and then think through the nitty gritty of how to apply it to them rather than just like speaking high level. We all know that we should that in a perfect world, great, you can charge twice as much for the same work. But what does it look like to drill into a client base and their problems and like decide on the best opportunity because we can all do more. And I think that's the trap. Oftentimes, especially when you go to conferences and you have software companies selling to you all the time, really the easy thing is to do more like, is to add that next new thing. But that's rarely the right answer. Especially in this age of kind of scarcity and not enough people to get all the work done and, and all that. So there you go. If you know. Ultimately freedom and flexibility in running an accounting firm always boils down to pricing. How do you get somebody to pay you more to do the same stuff? Hopefully that's a helpful exercise, just like boiling it down to as simple as what do I gotta do to get somebody to pay twice as much for what I already do? That is like how to find the meaningful pains. And then once you nail those things down, how do you build marketing around what those pains are? Does that look like posting to social media discussing those pains every day? Does that look like standing up a killer offer around a solution to those pains? That side of it for many of us may even be the harder thing to solve. Like, maybe it's easy to actually do this and find those pains. I know a lot of us struggle with what do you do with them from there? Like, how do you get to the other side and actually start marketing it? I'm not an online personality. Like I'm an accountant, right? So I know that's hard too. But step one is finding like what is the most meaningful problems to solve for folks. Thanks for coming and hanging today. I think we may do a Q and A next so if you got any cues, drop them in the comments. When people send me things, I will always show them. This is from Jimmy Rose at Content Snare who I got to hang out with a bunch at Zero Con in Sydney. These pretty dope. Jason CPA coasters. Thank you Jimmy. Thanks thanks for coming and hanging today and I'll see you in the next one.