326 DOUBLE Your Profitability With A Better Renewal Strategy

Oh, gang, do we have a spicy one? Today we are looking at our firm's value ladders, where we meet our clients on the spectrum of value from very low level, very entry level, to the people that absolutely adore you and want you to be a more integrated part of their business and life. Particularly for small firms, which is most of the people that listen to this podcast, the path towards greater profitability is on the value letter. Letter ladder. The value ladder. Not doing more of the normal thing, the middle thing, tax prep, bookkeeping. Not doing more of that, but finding clever ways to hack the value ladder to deliver greater value to the people who adore you. And as you'll see when we talk through this, delivering those services can be much higher leverage. Not like, not limited by the same constraints of doing the technical work. And that's the real big opportunity here. So come on in. I am pumped today. Let's talk about your firm's value ladder. I am straight off the back of a workout. I genuinely am pumped right now. Couldn't even be bothered to bathe for this episode. Tell you what, sometimes you just get juiced on something and that is such a gift. Like so much of our work and the quality of our work is energy limited. Where we're trying to. Big brain. Well, we should be doing this or this and that. Like, if you could just turn up at 110% every, every single day, most of your problems would go away. But today I think it's fitting as we are, for us tax pros, this is a pretty big deadline today. We're talking about something that is, that is zooming out. As we're starting to get into that season of the year where we're thinking bigger picture. We're zooming out and thinking about what we do for our clients and how to like double down on a. On a sort of parable that we all understand but may not know how to qu. Execute against. And I've brought this up in a number of different forms recently. Again, in a tax and accounting firm example. So say you're a tax firm. You know, I really push you to be thinking more about tax advisory work. Not tax prep, not the doing of. Of the tax return, but of the advisory work. And this is because the advisory work will generally be 2 to 4x as profitable as the prep work. We have roasted firms on this podcast where, you know, they are three people firms and tax advisory projects start at 10 to 12K. We had Josie Parr on the podcast a few weeks ago who is a solo tax shop Runner. All of her tax clients are on monthly recurring fees and tax advisory projects start at, I think she said 3 or 4K. And she is running a super profitable tax practice in halftime. And you hear these things and it may seem like, unthinkable. Like, I don't. You may just straight up not believe them. And I've. There were times in my life where I saw that sort of thing and I was like, yeah, no. And it's one of those situations where, like, okay, if this is normal for somebody, how do I. How do I recalibrate what my normal is to get to there? Because obviously, the basic math, it's real nice. Let's say you do $1,000 tax return. And I'm going to get back to the accounting firm example after this. Let's say you got a client, you charge them 1,000 bucks a year for tax prep. You run a 50% margin. So you make 500 bucks on that, right? That same client, if we can get them to pay for a $2,000 tax advisory package in addition to tax prep. So they're paying a total of three grand a year. The tax advisory, usually not any more work than the prep. In fact, it actually eliminates a lot of the prep work. But let's just say it doubles the amount of work. So let's say we got 1000 bucks in costs into it. That's now $3000. Top line project, thousand bucks in cost, $2000 in profit. By doubling the work, that $500 profit client is now a $2000 profit client. If you look at the business as a whole, the machine, you effectively just doubled what the company makes per, like, unit of input, work hours on that one project. And we can understand the arithmetic of that, right? And there's a lot of different. If you chop that up, like, parts of that where you can get stuck, like, how can I get somebody to charge me two grand? How can I have the conversation, like, how can I, with a straight face, say, pay me this much, even though you never have before? Or I already offer tax advisory, and I only charge $300 for it, right? All these different things that you can kind of pick apart. But when your head's around that math, you can kind of reduce the business to, okay, primary objective, the prime directive, as it were. If you know, you know, where's Derek Foote? Derek Foot just got really excited. The prime directive is, okay, the goal this renewal season is kind of just to get a few more people onto this higher value package to get them up the value ladder. A bit because we just did the math. And if we can get another one of them up the value ladder, we can cut, I mean, if we want to, we could cut two or three legacy projects. And why are we piecing out of here by 11am every morning? Spoiler alert. You won't because you're going to go get a nicer car and upgrade your children, new house and all that stuff. That's the human condition. That's a, that's a whole other podcast. But accounting firms have the same thing where it's like, okay, I'm doing this, this maybe basic bookkeeping and maybe we hop on a call once a month or once a quarter, but what is the more advisory framed version of what we're doing? First off, it probably requires somebody having the time and the bandwidth and the headspace to do advisory. And if you are mired in the muck of the month end close and doing the work, that's not going to be you. And so step one may mean being willing to separate yourself from some of the work that is lower on the value ladder, which being willing to like make a deal with yourself and with your team that is invaluable. To say I'm not going to touch this type of work anymore is so, so useful. Please don't be the small business owner who is unwilling to separate themselves from any part of the business. Because as long as you have to have your fingers in every single thing and be the best person at every single thing, you will not be at your best. You will never reach your potential. If you have to be into everything. And particularly as you've been in this game longer and longer, most people evolve to, they're not getting a ton of fulfillment from reconciling bank accounts. What they're enjoying is having conversations with business owners. So let's build the business in that direction. If that's you and that's what gives you energy right now, you will find that most of your team actually go through that same evolution. They can do month end closes for a few years, but beyond a certain point they're like looking around like, okay, what's next? I need something that's more challenging and you as an employer to be able to pay them more and continue to challenge them. If you can enable that, them getting more into advisory, that's a really cool opportunity too. So just like on that tax planning, tax advisory example, what is the equivalent for accounting practices? You know how much money a CFO costs? A lot of freaking money. A huge spectrum. But quarter million to half a million bucks easy for a vcfo. You go to like a now CFO company like that, you're easily going to be paying five grand a month or more for a CFO to come in and support a one or two million dollars small business. But what can you offer? Let's say you're doing all the like back office bookkeeping stuff like that. Say that's a fifteen hundred dollars a month project right now. Could you come in and and offer a $2500 a month CFO package? You absolutely could. And if your client has sticker shock at that, put that in terms of their next hire. Because people will often be fast to go out and make another hire because that means their business is growing. But Compare paying you 2500 bucks a month to make the right decisions and not lead your business on this meandering path, but be more efficient in the decisions the company makes. Compare paying you $2,500 a month to support them in that, with them going out to the job market and spending $2,500 a month on what you can't even hire anything for 30 grand a year. I would oftentimes actually frame it through the lens of would you rather pay me to come help you with this or would you rather have another employee who you're paying $20 an hour and you have to manage working $25 an hour? That's a dollar an hour, 25 hours a week. That's a really great way to frame the value of do they want to go out and hire an ops manager or do they want to hire you who's done this with a hundred other companies to tell them, here's what to do and what to not do. Oh, and by the way, with the advice I give you, I can actually deskill that ops manager role a lot because they won't need a PhD in figuring out what to even do. I'm just going to tell them and they'll execute. And so there's absolutely a version of that quote unquote bookkeeping engagement where somebody will pay you 2x 3x what they're currently paying you. And what you're adding is a couple meetings a month. Now as soon as you've got that, you're like, oh boy, do I really want to do as many of these kind of middling projects that I have. And you start getting more selective as you look at those, because the profitability of them kind of hurts. You're like, oh, we're making really good money on this other stuff. But these things, they used to be our bread and butter, but they don't look as good as they used to. And, and so the way you start looking at them is, do I foresee a path to, toward that person climbing the value ladder? Yes or no. And if you never see them climbing that value ladder, then you start thinking a little more about whether you let that client go. And so this is what I mean when I say we need to be thinking more about our value ladder and develop, developing it beyond like the fat middle that is the basic thing that every single accounting firm offers and is hard to do more of. Like most of our bottlenecks in our firms is this fat middle of the basic thing that we're trying to do. Prepare more tax returns during busy season, get more month end closes out by the 15th, stop selling more of that. Particularly if you have clients who you can take up the value ladder where the constraints will be different, but you're going to make way more money for that work. This episode is sponsored in part by by Live Flow. I love software vendors when they love me and it's why when I go to accounting conferences, I look around and I say who's here and who's not here. You will consistently notice that the folks that turn up at accounting conferences, the brands are the most engaged, have the best understanding of accountants. There are enough tone deaf software companies out there that just do not get it and like are not solving meaningful problems for us or are developing in this direction that they think is interesting. And we're like no, no, no, no. Like this is the path. It's actually interesting for my business. Live Flow man, you see them out in the wild. I see those folks probably six to eight times a year, the founders at all sorts of different conferences. It is a great validation that they are actually building something of meaning for the way that we work Liveflow. Basically their business is they sync data from QuickBooks or 0 to Excel or Google Sheets and there's a bunch of different ways you can use that from reporting to extending information to like third party stakeholders who you don't want to have in the QuickBooks file to month end close management. A growing number of firms are actually managing the month end close from a single workbook by sinking a bunch of data out of the accounting file all at once. So you got a whole bunch of tabs in this big workbook. You're not like printing a bunch of reports from the ledger, right? Like that's what they're trying to get away from anyways. Lifelo is A company that's been a leader in that from the beginning. They are not like a quick little plug in like cheap utility as much as they are. We're gonna help you do this with a whole bunch of your companies. We're gonna help you with consolidations. Like we are the kind of the full suite for doing this. Like a platform for extending your spreadsheets rather than like a little utility to like sync some data back and forth. If you're at an accounting conference, take a look for lifflow. You may see them there and learn more about lifflow. Check out the link down in the show notes. This episode is sponsored in part by tema. Do you like middlemen? I don't. Get out of here. Middle men and women Team up cuts out the middle people. Yeah. By giving you direct access to talented accountants in the Philippines. I don't need some suspicious character between me and my team. They're my team. Team Up's got the on the ground recruiterments in the Philippines that'll help you find super, super talented people with the experience that you are looking for. And then after you hire them, you know what Team Up's gonna do. They're gonna. They get a gtfo. Can I say that? They get GTHO my biz. Unless. Unless you want help from them. That is one thing that I heard they're doing more of. It's just like offering support. Like hey, never worked with offshore people before. Happy to hop on a call and kind of give you some best practices. But what they won't do is be the middleman long term. Charging fees, cutting out a big old part of the monthly check that you thought was going to your team member that's actually going to line that middle person's pockets. Now team up. Okay. That's their model. Direct hiring in the Philippines. All they're going to do is they're going to help you find people rather than going through a BPO where you're paying like, like a facility or kind of a facilitator or employer record and the person. I know people that do it both ways. There's actually arguments to be made for both ways Team ups approach. They want to help you work directly with the team if that's the flavor you're looking for. Check out the link down in the show notes to learn more. So zooming out like what is your value ladder and in your firm? Basically customers want a result when they come to you. Right. They're in a state. They want you to get them somewhere else. So the Framing is, you know, we help this type of person to do this via this thing that we provide. And so in crafting that value ladder, we need to be thinking for our dream customer, what's the value that we can provide? What have they maybe unsuccessfully tried to do in the past that has brought them to this point where they're coming and talking to us, and what is the, the new opportunity that I can offer them? And oftentimes, gang like that is as simple as an accountant who will actually respond to their emails and their calls and stuff like that. And so as we're reimagining the value ladder from the bottom to the top, it's ultimately all going to be anchored around who are we trying to serve, who is our dream customer, and where do they want to get to? A sidebar on dream customer. Because this very quickly can be derailed by the whole niche specialization debate, because folks more or less kind of have, have settled into a camp of like, I'm into it, I'm not into it. I'm nervous. I'm somewhere in the middle. Here's, here's. I think a more constructive version of the specialization conversation is you can be specialized with the very next client that you take in. Because the reality is a niche firm starts a single client at a time. And so think of this not as throwing out the playbook and, and revamping my firm overnight, which isn't the way to do this and isn't smart. Like, you wouldn't want to cut a whole bunch of your clients to say, oh, we're, we're just doing beekeepers now. You don't commit to that until you got a bunch of beekeepers. They're better than all your other people. And it is so, like, compelling the evidence that you're like, no, we're really wasting our time on our other stuff. That's when you niche, you don't niche by going like, okay, yolo, I, I, the kids are hungry, but I'm still just going to insist on working with landscapers. That's not how a niche firm gets built. Anyone, regardless of where your firm is at today, defines the future of their firm by the next customer that they bring in and there is no harm. And that next customer being a little more specific or a little more targeted than your last ones, I mean, framed a different way. This is manifestation, which I'm a big believer in the notion that you can kind of manifest your future if you're more intentional about the things you do and how you kind of bring those things to life. That's what we're talking about. By getting more specific, it's not about who we're dumping today. It's about how we talk about what we do so that it actually converts, so that it actually finds somebody. Because if we talk about what we do in too general of a way, it doesn't find anyone. So the more specific we can get here, the more attractive your value ladder will be. And if you struggle with. I don't honestly know that I have anything that helpful to offer, like, higher up on the value ladder, I feel like I'm already kind of pushing up against my ceiling. That's oftentimes a signal that we aren't specific enough yet. Because you know what? Like, I would have very little offer to offer to, like, general business owners. It gets way, way easier to be a guru the more specific you get, because the conversations you're having every single day are more similar. And the reality is, when we talk to client B, we're leaning pretty hard on what we just learned and told client A. And the more similar they are, the more easy it is to be an expert just through repetitions, through having seen the experiences of these different entrepreneurs. So if you're feeling like I don't have a way to climb that ladder yet, I don't have anything more valuable to offer, I would say on the surface, push back against that a little bit, because there is a natural. A human. Like a normally balanced human is one of my favorite quotes. Um, your internal identity will perpetually lag behind your external reality, what you're capable of, and what other people will even tell you that you're capable of. That is always out ahead of your internal identity, what you actually think you're capable of. That's why oftentimes it takes a bunch of people telling you, oh, no, you're the person for this. Oh, no, you're capable of that. It takes people telling you that and people giving you money for that thing before you actually believe, okay, yeah, no, I guess I can do this, right? And then there's the next thing, and that cycle kind of continues. Like, that's just. I think that's a normal, balanced human being. There are people who are not wired that way to, like, an irresponsible degree. And oftentimes we look over there at them and we're like, oh, no, if I lean into this, I'm being like them. And all likelihood, you aren't. Most people are not wired that way. A few people are, but that's probably not you. So how should this inform how we approach renewal season? Because most of us, as we get into the fall, we're starting to think about namely who we want to renew and who we don't want to renew. Right. But also renewals are a massive opportunity. I've shared before, our firm generally grew like 10% year over year. And as a good sized firm, so that was a significant amount. Like we usually wouldn't have any partner in the firm that wasn't pulling north of 100 grand in Newark a year. But the biggest source of growth for our firm every single year was growth within the client base and at renewal time because they would have a good experience and then have a willingness to go deeper. And we were strategic about, we think you would benefit by actually adding this and that and cross selling additional services where it would fit good with something they were already doing or something that they liked. And so the largest source of growth was within the client base we already had, which is a form of bringing them up the value ladder. And I would actually argue it's good to be thinking about now during as we're getting into renewal season. But I think the traditional three tier proposal framework with a renewal isn't enough one, because it happens once a year. And we could for sure have more conversation with clients throughout the year to be like, hey, do you want to go up to this or that? But I find in the wild when people talk about those three tier proposals, the differences are very basic. It's like, do you want us to do payroll? Do you want us to do bill pay? Do you want to have a live meeting with us every quarter? Do you want to have lighting live meeting with us every month? And that's starting to tiptoe into advisory. But I think we can do better than that. And maybe this starts with your annual renewal cycle, but I think it's something that should be more active throughout the year to pull people up that value ladder. Because again, as we talked about at the top, I honestly think you can boil running a more profitable small accounting firm down to how do I get the tax prep client to be a tax advisory client, how do I get the month end accounting client to be an advisory client? I honestly think it's as simple as that. When you look at how compelling the profit multiple is from getting one client from A to B, and you have clients on your client list right now who are willing to do this, who we have not done it with yet because we haven't asked. That's the downside of fixating on whatever our Core service is, is oftentimes we deliver that core service. We, we get people to complain about how much it costs and all that, and that drags us down. But we don't hear from the people who would happily pay more for it and pull you even more into their business and all that. And so we don't really think about those folks because it's much more common that folks on the bottom end will complain than it is folks on the top end will complain that you won't do more for them. Right? And so if we can boil our firms down to what would it look like if 5% of our client base would upgrade to this, that would actually give us the flexibility to cut probably 20% of our current client base if we wanted to, while maintaining the same profitability. If we can boil running the firm down to that, then this shouldn't be a once a year endeavor. Right? These should be conversations that are happening more throughout the year. And we should be putting more thought into how you develop folks up that value ladder in various different ways. And so I want to give you some, some ideas, some thoughts around how to go both up and, and down on the value ladder. Because while most of us don't go up far enough, I would also argue that a lot of us don't go down far enough either. By having an offering that will actually attract folks into kind of an awareness of your accounting firm. That's how we get leads, is not by standing up our biggest, most premium offer and saying, this is what we do. We get leads by offering value. And oftentimes that's free. That's how folks find us. And if that value ladder doesn't go low enough, then it's costing us a lot of attention. Because that low value ladder step, that is how you ultimately find attention. Now if you had your most premium, like top, most expensive value ladder option, and you walk up to somebody that doesn't even know you and you say, here's the thing, if you pay me $10,000 a month, I'm going to do your monthly bookkeeping, but we're also going to have two calls every single month to discuss business strategy. And they're like, bro, I don't even know who you are. Like, you look like you're 15 years old. Why would I ever do that? So obviously, like, you don't stand up, you don't promote the tippy top, like most valuable premium thing, right? Like, that just doesn't make sense in most contexts. But the opposite end of that value ladder, a framework that's clear down at the bottom. That's like, hey, here's our four step framework to never have to stress about your taxes again. And maybe there's a DIY version of that, maybe there's a version of that where they need to pull you in, or it refers that work to a partner, but something like that, something bite sized, that's what gets people into your orbit to begin with. But if they can only start halfway up the value ladder, you lose a whole bunch of people that you otherwise could have collected had you had something lower on the ladder. Interestingly, big firms who are more oriented higher, higher up on that value ladder, interestingly, those bigger firms will oftentimes have more at the bottom of the ladder than small firms do. So you look at a, a firm like, like Brandon Halls, where they, they run a bunch of webinars, they have podcasts, they do content, they give away all this value that is the bottom of their value ladder. But ultimately how that company makes business is like advisory services, tax advisory services for real estate companies, it's higher up on that value ladder, right? So some examples for tax and accounting firms of how you could go up on the value ladder, but also how you could go down on the value ladder. So one example of going up, how about a quote unquote, inner circle offering? So for the people who are already on your most premium plan, what is the even premier version of that plan? Maybe this is like a monthly group call where people can see the, see the questions of other people in that group. Like these could be sort of handpicked folks where you're like, these are the people that I would want to pull into this and they get some degree of access to each other, or it's just kind of like a sort of a monthly mastermind or something like that. Each of the steps on this value ladder, if you have 100 people in your core offering and 20 people in your, your premium offering, when we're going to step beyond that, we're probably talking about, you know, how do we pull five people into this premium or offering? Because the same like, leverage exists going one more step. So if that premium offering means I can trade one project for three normal projects, that premium offering, that ought to be another step. And that actually ought to mean that like that fat middle of the okay work, you ought to be able to cut a bunch more of that the more you can get, folks, yet another step up that value ladder. So think about what is your most premium offering right now? How many people do you have on it? Because there's a. There's a size threshold where it makes sense and where it doesn't. Like, if you only have five people on your most premium offering, you don't need a premium or offering. You need to focus on, how do I get more people into the premium offering? And then once you got 30 people there, then it's time to think, okay, what is. What is more premium than this? But on the flip side, if you've got, man, in my firm, we had maybe 200 people in the most premium offering that we had by the time that we left, where we were doing multiple, like, tax projections a year and hopping on calls, we had several hundred people on this offering, which is just begging for something more premium. But you know why I didn't go more premium? I didn't know how to. I couldn't look at other accounting firms and be like, what are they? What are they doing? Is this normal? What's normal? We're just doing tax planning. That's normal. How do we think beyond that? I just didn't have a model for how to even do that. This episode is sponsored in part by Finn Daily. Pop quiz time. Did you know that I once developed a SaaS app for accountants that fully automated the cash reporting that we did for our clients? True story, I built that, like, three years ago, and then I sold it to a guy, Luke Templin. And Finn Daily is still running strong. I'll put a link to it down in the show, notes Fin Daily IO. I frankly love it. Maybe I'm slightly biased, but basically how it works is it's like it's an email builder, kind of like an email marketing tool. But you plug variables into those emails, and those variables can be values that are pulled from QuickBooks, from Xero, from Plath, like, banking figures, even from, like, zapier. If you want to pipe in your own information, you build these email templates and you plug variables in. It can do stuff like math, like adding up a number of outstanding bills, that sort of thing. Tables of, like, outstanding invoices, build all this stuff into emails. And then you set the schedule that email will send on, and at the time that it sends, it goes out, makes the API call to all those services, pulls in current data, and then sends that email off. And this was the cash reporting that we were doing for our clients to be like, hey, here's the bills we got coming up. Here's how much money's in the bank. Here are all these different factors all in an automated email. And folks were paying me a bunch of money for this service now since I got out of thin daily, done a bunch more stuff like being able to connect to a bunch of different quickbooks files and like pull that stuff into a single email for like multi company sort of things. Banana bunch of cool things. Super useful tool. Like it's one of those things where if you have the use case for it you're like oh my gosh where has this been all of my life? And if you don't you're like why would. I don't understand this. Why is this even. Why does this exist? I don't. Why would I want this? I find the people are in like one of those two end of the camps. I still love it. Still around a fun bit of Jason Daly lore Thin Daily is Check out the link down in the show notes to learn more. This episode is sponsored in part by Forwardly. Are you sick of waiting for ach transfers that stick to bank hours or checks to get caught in the mail? Do you want to save hours on bill pay each month for you and your clients? Forwardly is your solution for Instant Instant Instant B2B payments. Forwardly offers an easy to use award winning Arn AP solution for accountants and their small business clients featuring advanced approval workflows and a revolutionary four way sync four ways with accounting software. What could the other ways even be? The software eliminates all manual work, automatically categorizes and records financial transactions for both customers and vendors, maximizing cash flow by ensuring payments are received instantly in your bank account. Enjoy Same day AC for free. Why is that not a thing? Why is that not more of a thing? Forwardly it is a thing obviously. Set up your free account@forwardly.com to work towards a free iPhone offer. Color me intrigued. Check out the link down in the show notes. So some more ideas here. That first one how to go up further. Some sort of like inner circle offering where it's a greater level of access. A next example how to go down how to go down the value ladder. How about a free review of of their prior year financials or tax return. That person can submit that information. You can do a little review, record a loom video, send them an email response, whatever that is. Develop a process for it so it's not you. It's not like the biggest brain person on the team that has to do all that work. And in all likelihood in the process of doing that, you're going to find some things right? You almost do when you pick up a new client who had another tax Preparer or whose spouse was doing the books or something like that. In all likelihood you're going to find some things and that's going to be a handoff to the next step on the value ladder, which is you doing that work for them. But you wouldn't have got them unless you had like put that thing out there to say, like, hey, we'll do this thing for free. Like that's how you got them in the beginning. All right. Another example going up the value ladder, another version of like an exclusive club that's maybe tied to a revenue threshold was the thing from Silicon Valley, the Trace Trace commas club or something like that for billionaires do something like that, the dos commas club. Some sort of threshold where you have like folks who are perceived to be very successful beyond this threshold, but you know, when they're past that threshold, it's just a different set of challenges. You have collected a bunch of people and you have a subset of your clients that are maybe the most successful of them all. Maybe it's an offering that you only extend to those types of people. It could still be one on one. But you say, hey, just so you know, we have this service offering that we only offer to folks over this threshold. And you just got there. Let us know if you're interested. We've got X other people that do this. Here's maybe a little bit of social proof if they've had good luck with it. It could also be like what we talked about before, where you give some access to those people in the group where you're like, hey, do you want to join this group? It's a bunch of other super successful people where we can learn from each other. Where the value isn't all coming from you, it's coming from the other people in the group. And that is a, a real hack. If you can start enabling that. Obviously people are opting into this. So like sensitivity and all of that, like folks are opting into that functionally. Is that something that even ought to be part of, like your accounting firm? If you're on a CPA firm? Probably not. So there's some, some considerations there for sure. But don't get hung up on that. Like do the due diligence to figure that stuff out. But ultimately, how do we deliver more value? Value to people? Exclusivity, A club where like you've achieved this thing and now you get access to this, that's appealing to people, right or wrong. It is. And that is a much easier thing to sell and facilitate than Hiring more tax professionals, doing more month end closes, like it's a totally different business. And because it's so much more profitable, you can trade one of those clients for like eight regular clients. That's what we're trying to get to is like what is that more premium thing up the value ladder, going the other way, going back down. How about a free review of your finance tech stack? If you offer like an annual service where you will sort of review the tech stacks of your clients, which is absolutely worth doing. If you run a bookkeeping practice, this is like almost essential because your client's tech stack has such a great impact on your ability to do your work efficiently. I mean it starts with banking, right? Like what bank are they on? How much pain does that cause you? But it's also bill pay, it's also card management. It is a thing that is worth being opinionated about. An annual tech stack review, totally worth doing. But in terms of an entry point, the bottom of the value ladder, like a free review of somebody's finance stack. And so what are the different things that could lead into. Well, maybe you have a referral agreement with, you know, say you're going to send somebody to ramp. Like ramp pays people a pile of money for referring folks to them. Maybe that leads into just a standalone tech stack advising call, like a live call version of this that's a paid. Maybe they're so impressed with that, it just leads straight into a bookkeeping engagement. Two more examples. One, going up the value ladder as you get into like the Tony Robbins of the world and like kind of the premier think people and even online think think persons. You see a lot of this where you have these astronomically expensive masterminds and it's, it's just one of those things where it's like why would anyone be paying $10,000 to go to a mastermind? Why would someone pay a thou, a hundred thousand dollars for a consulting day with this person? The reality is people pay that because they think it's worth it. Because it's going to unlock something that will, you know, save years from their journey, generate more revenue. Whatever it is, people think that it's worth it. So what is the most extreme version of going up that value ladder? Like if you run an accounting firm, what is the deepest you could possibly go with someone? It probably goes as far as taking investment in the company, like you taking an investment in the client's company. And I actually know quite a few accountants who do this where they will. Sometimes it's like they'll give discounted accounting firm services and take some equity in the company, which is different than what I'm thinking about here. And I don't know is a good idea that's basically just somebody doesn't have money to pay you so you'll take equity, which really hard to like liquidate equity. So I'm not sure you ever get that back in most situations. What I'm talking about here is you're at a stage now where your premium folks have gone to an even premier place. Premium, Premium, you know what I mean? Now you are growing this even premier tier and you know, maybe you do like an in person event once a year or something like that. But even of that group there will be people who are willing to go further, even further. And is that worthwhile for you? If it is, then you say okay, here's the next level up. It's you got to plunk down a quarter million bucks and give me at least 20% of your company or something like that. And they now have you further in there. That may feel like unthinkable for you right now, but the reality is the value ladder like never ends. Like it keeps going up and up and up and up. And you'll have different people at these different steps. And if you're a young firm, if you're just getting started out, you're setting up camp real low on this because it feels like you have to just to get people in the door, right? You're like, I can't get somebody to pay me $1,000 to prepare their tax return. Like I'm setting up way down here. And so everybody's going to be at a different spot on this journey. I think the main lesson here is not to get too consumed by the normal deliverable by getting too fixated on one step on that value ladder. Once you get in a single step beyond a certain threshold, I think the goal needs to be how do I get people to the next threshold where whatever I'm delivering is worth 2x as much. So, so that when I get one person there, if I wanted to, I could get rid of two people at the, at like the level below that. Probably the, the type of folks who will never move up that value ladder because if we're boiling firm running down to how do I get that like the person on that more premium tier so that I have that much more flexibility. Cause we're making you know, two times the money in half the time. Then it really does all become about do I have a step that the people who value me most can go up to next. Do I have five people in there? Then we're probably good. We probably don't need any more steps beyond that. But how do I keep building that? Okay, once we've built that, is there something beyond this that we could get to? And this is also the solution in my mind to I set up camp here, I promised this to a whole bunch of people. But now it doesn't make sense for me anymore because I'm better than this and because people need more from me. So as you're going through this journey, like, be really clear. It's the firm that is delivering this value to everybody. But as you continue to grow, you're going to be capable of more as well. And so who's going to grow with you? You don't want to stay stagnant at that same kind of like level of value until the end of time. And so if that premium, premium or level of service was tax advisory or an advising call, you may pump three years into that and that may be really valuable. But at a certain point, the team is going to upskill as well. And they're going to get better and better at this stuff and they're going to begin filling those roles and being the advisors in the premium or level. Gosh, I should have found a better way to say that from the beginning. So I didn't have to say Premium, Premium or 30 times this episode. But at that point you're bored of that, right? Like you want to go to the next thing and so you pioneer that next thing and you say, here's the next step and what that looks like. And now I'm going to take five people into this next step, this new frontier, and the cycle continues and that value ladder never stops. And if you're a small firm and you don't want to grow very big, but you want to keep doing more interesting stuff over time, to me, the path to doing that is climbing the value ladder, not doing more month end closes or more tax returns. You might have more clients in your entire value ladder because you've gone lower, because you're willing to take on folks. But if all we do is get to like month end closes or tax prep and we stop there, that feels like a treadmill, that feels like a hamster wheel. That could really burn you out. Particularly when we hear from the folks who seemingly have the most flexibility in their firms, we consistently hear from them over and over again. What they're selling is probably a step beyond on the value ladder. What you're delivering right now, right? Like, I think that's probably a common trend that we see is, is if they have a level of flexibility that you can't even get your head around right now. You're like, how do. What do you mean? How is it that they can run their firm in halftime and make just as much money as I do? It's because they're delivering something that is a step up the value ladder to what you're delivering right now. And as we are getting into renewal seasons and having these bigger picture conversations with clients, it is the best time to consider who wants more from me. Do I have a bunch of people at the top of my ladder right now or just a few? If you have just a few, that's fine. It means you've probably built that up high enough. Maybe be thinking about the opposite end of that ladder. Do we have something at the bottom that's attractive to people that will get our firm's name out there and get more folks into that ladder? Hopefully specific folks, not just anybody. But if you are like my firm was and like most firms are, where your most premium offering, you have a whole bunch of people in and premium is relative. Premium could just be tax prep. Premium could just be bookkeeping. If you have a bunch of people in that most premium tier, in all likelihood there's a subset of people in there who, who love you and would happily do more with you. And so can you give yourself permission to, for you, the operator, to get a little out of that, that fat middle, the doing of the work on the vanilla stuff so that you can pioneer what the next step on the value ladder is. And for every one of those clients you can pull into there be making what we're making on, you know, two or three of the vanilla clients. Something to think about, especially when you consider the natural constraints of running a small firm and how you're never going to build this giant warehouse of folks who are just cranking out stuff like. That's not the vision of, of a small firm owner. It is. I want flexibility. I want a super profitable thing. I want to be well respected in my space. And I want to like, run a rad firm that gives me the flexibility to take time off and make good money and like, have a life. I think for most firms, that value ladder and how you keep growing up it, that is what keeps this thing interesting long term, but also gives you that flexibility and profitability to make it whatever you want to be. I would love to know your thoughts on that. Obviously, I'm fired up about this right now. Pop a note down in the comments. Tell me if there's something you're considering during renewal season that will kind of unlock a new value ladder for your firm. The more people see that, I think, the more accessible it makes it. And thanks for coming and hanging today. I'll see you in the next one.