412 The Patience Required To Find Better Clients 😓

Gang today, man. Sometimes it can be so hard to be patient when you are building your accounting firm and you're like, I'm pretty sure I'm doing the right things, but we're not there yet. I can tell you the mistake that I made. I got impatient and I started bending the rules here and there. I would like fudge. I wouldn't normally make this higher, but we're in a growth stage. Or I maybe wouldn't normally let this client in the door, but, like, I want to hit my numbers for next quarter. How do we balance that with just like sitting back, sitting on our hands and just trusting the process and trusting time that it'll all take care of itself? That is hard. And that is what we're talking about today. I imagine you can relate. Come on in. Let's do it. So this all came from a message I got from here. It is message I got from Don that I think is going to be super relatable for you.

Morning, Jason. This. My name is Don. Thank you for opening yourself up to these kinds of questions. I appreciate your feedback. I've really enjoyed your podcast and the content you've produced over the past year or so as I've been listening.

Stop it, Don.

I only recently started my own firm with a small group of clients from my prior job, and I'm trying to think of what's the best way to fill up my client list. I feel like I'm going to have some capacity. I'd like to fill that. Not just, you know, for additional financial cushion, but also to make sure that I'm using the time I have more effectively and not just, you know, playing video games all day because I'm bored. And what I have now are pretty much all what I would define as a clients. They're doing all the things that I feel like I want to do at the moment, and I'm weighing whether I should hold out for more of those as I grow or if there's some value in having some B clients, maybe ones that aren't utilizing all the services that I'm providing at the moment, who presumably would be easier to find and less time consuming to service. And I just kind of wanted to get your your thoughts on that, especially as I'm looking to again fill out my client list over the next 12 months.

Don, thank you for the question, by the way. Too many question, video, voice memo, email at the very least. Usually I can email you back a response. Don, Every. Every single firm struggles with a deal of this. So Don's with a version of this. So Don's situation is he just launched a firm and hasn't filled up that client list yet. But the things that you're struggling with are, are the exact same, even for the firm that is over capacity. Because every time a client comes into a firm that's over capacity, you got to make that hard decision of is it worth it to me or not? And the short term version of that, of that decision looks like, well, Mikey's, Mikey's plate isn't full yet. Maybe we, maybe we bring that client in just to fill up Mikey, because Mikey's a fixed line item on the, on the expense. So any new client, any new client is, is pure profit, Right? Right. And then Tina leaves the next day and you just let a C client in the door. So everybody deals with a version of this struggle. 4 thoughts here for Don's question number one is kind of a clarification. There may or may not be anything to this. One thing that Don mentioned is that yes, it will be easier to find clients that are not that a grade. Right. That are not the best of the best. And he said they may be a little simpler, easier to serve, less time consuming. One thing, I don't know if this is what Don's doing here, but this is a really common thing. As we're thinking about what are good clients versus bad clients. Oftentimes we think people who are willing to pay for more services, good people who aren't bad. And that can be a bit of a trap because what you actually end up doing is bundling a bunch of things and actually doing more work for someone who will happily pay for more work. But that doesn't mean it's any more profitable work for you. And that's why you got to be really careful when you're expanding the work that you do for a client. In fact, been a ton of thought leadership for, for years around. You need to get into advisory. You really do. And what that ends up being for a lot of people is your most scarce resource, your most qualified people, they're now doing work that maybe pays a little bit better per hour for the clients who will pay for it, but only they can do it. And so like one of the, one of the yardsticks for is that good work or not is how delegatable is it, how easily can you hire somebody to do that work? And advisory work is the very hardest stuff to do. Now, lots of things you can do with advisory to de skill it, such as, you know, building a system for how to advise for a specific type of entrepreneur. The more systematized it is, the more you can delegate it right? But one thing I wanted to make sure we called out here C or D clients or clients that are less than A clients. It doesn't necessarily mean that they would take less time to serve and and it is always worth disassociating effort volume of effort with are they a good client or not? Because there will be very small volume of effort great clients potentially and there will be humongous volume of effort terrible clients. And I I, I, I think part of this may be with US tax firms there's an association of high volume 1040 shops being mills that don't make money and aren't any fun. And there there's some truth to that, plenty of exceptions to it still. But I I do think that's part of where that that misconception comes from. So I, I, I do try to stress with people be careful not to associate simply the fact that a client will pay you five times as much does not necessarily make that a better client for you like automatically. All right, so that was my first thought that kind of want to make sure we called out that clarification. This episode is sponsored in part by liveflow, the folks that give your spreadsheets and your financial dashboards superpowers. Two superpowers that Live Flow gives you. One, a button in your Excel and your Google sheets to pull in data from any old client accounting file you have in QBO or Xero. Imagine just having that a button away all the time. Being able to pull that stuff into a spreadsheet, either a one time poll or an ongoing like continuous sync. Second superpower they give you is the ability to throw together super quick, as simple or as complex as you want. Financial dashboards that your clients will actually use because you can make them more actionable than financial statements and it doesn't require this big old like rigid reporting platform that they then have to go log into or something. You create these dashboards, you share them with a link. Just like with the spreadsheets. It can be a one time data push or it can be an ongoing sync so the client just keeps going back to that same link. Super smart stuff. Particularly if your clients aren't making sense of those financial statements because that's not an easy thing for most business owners to do. Learn more about LifeLow. Check out the link down in the show notes. Okay, this podcast today is brought to you in part by the fine folks at Team up who help you find Uber talented accountants in the Philippines. I got a little report that I get from the squad at Team up of what they've been up to the last few weeks. And the greatest litmus test of is this thing actually working. Are people actually using it? Is. Is just that are other accounting firms, are they doing it? But also are they coming back and doing it over and over again like I did. I made my first hire in the Philippines, kind of being like, is this a thing? And man, we. We came back so fast, ended up making three more hires in rapid succession. Team up right now. Let me look at this. Are you kidding me? They've got 27 active projects right now. About half of them are with returning firms for everything from bookkeepers to senior accountants to tax accounts. Senior tax accountants, executive assistants, gang. It's happening. And the reason why people keep coming back is because it works. Because the first one works and they're like, oh, okay. This is actually a way to get a whole bunch of work done because it's so much easier to find accounting town in the Philippines right now than it is to find it onshore. Bunch of firms I know personally work with Team Up. Team Up's approaches is to connect you directly with accountants. There's not a middleman taking a bunch of money out of that duffel bag of cash you send each. Each month. That. That's not how it works. But you know what I mean, there's no, no nobody else taking fees out of that. The money goes straight to the person you're working with. Basically just recruiters. They're finding you really good, really good accounts to use. That's it. To learn more about Team up, check out the link down in the show notes number two. Be like widening what you will let in the door and being able to wait, make that compromise. That is a hard decision and it's worth kind of backing into. What is my why for doing this? If I am going to do it, I got to have a really good why. And the example we just went through of. Of Mikey. Mikey's plate only being half full. Is that really a good why? I think that's. Honestly, that's probably what the majority of people do. And I've been guilty of that before. You know, look at the squad that you got and you're like, I got to fill up this squad. And then you fill up the squad and you're like, crap, I need another person. Then a great client comes in the door and you're like, ah, well, they're a great client. So we got to take them, they take crappy care of them. Because you're over capacity. Right. I mean, in a situation like Don's here, where he doesn't want to. He doesn't want to spend all this time playing video games. First of all, Don, there's a lot of people listening to this right now for whom that sounds great, Myself included. In fact, if you are early on in your firm running Journey, everybody on kind of the other side of that, where they're at capacity, they're like, man, I wish I could actually go back to that. That sounds really, really nice. Like having the flexibility and the agency to even be able to decide that, like, that sounds wonderful because I'm not covering a bunch of people's salaries, and I'm not digging myself out of the mistakes that I already made. And this may not mean much, but that flexibility is not necessarily a bad thing. And it's very possible that as soon as you lose it, you miss it. So, I don't know, keep that perspective. But that very much feels like advice from, like, the persons on who's on the other side of it. That's like, oh, if only you knew how good you have it right now. I don't want to be that guy. I would just say be very, very careful. Because if you do let a bunch of stuff in the door, I do think folks building their own firms are perpetually surprised by how quickly they do fill that client list. If you fill it up with bad stuff and then 12 to 18 months, you're just cutting all those people loose, that's kind of sucks, right? Because you don't want those people to take up slots that down the road could be filled by. By better clients. Right. And. But it kind of boils down to, like, how patient are you willing to be? And if we think about how we allocate our efforts inside the accounting firm and all the different places we could plug in. Particularly early on in your firm running Journey, you're probably solely focused on production, on doing the work, because when you work for somebody else, that was all they let you do. And so when you go out and you run your own firm, the thing that will calm your anxieties and make you think, like, okay, everything's going to be all right. We're working, it's going to be doing work. But oftentimes what your firm needs from you is not that is not the making of the pies. It's more abstract stuff. And so if you're. If it's really hard to sit on your hands and be like, I'm not totally, you know, full up yet. Like, consider what are some other things that you can do that are not production related at all. So things like, like systems work for sure and getting that software stack nailed down. But also, sorry to say, the M word, a bit of marketing. How could you go out and, and increase the rate at which you find those A clients or go out and do some tests to potentially find that S tier client who's even better than your A clients? And now that S to your client, that becomes the new model for future A clients. That's the new A. And that's like those are the big opportunities for accounting firms where accounting firms really like, change what's possible from a profitability and a flexibility standpoint. It comes from those steps where your A clients actually get downgraded because you found a new A client, you found a new ceiling. And that stuff doesn't happen generally just by sitting back and waiting to see what walks in the door. And so if you're, if you're struggling with, with patience to like sit back and just sit on your hands until that client list gets filled up, maybe it's a little bit easier if you can pump some of those efforts into, I say, marketing, marketing activities that will attract more of that specific type of a client. On the other side of all this, when people are at capacity, that's one thing they kind of rue is like they don't have the time to go out and try to find a better client because they're stuck with the numpties they already. So they're not, not able to do any of that marketing, whatever that marketing looks like for you. And the place I recommend people start is what comes naturally to you. Is it writing? Is it going on and, and being interviewed on a podcast? Is it public speaking? Is it doing influencer stuff? For me, I learned that it was making video. And I actually didn't even know that until I started doing it. I learned that video became this really fun sort of silly creative outlet. And so the competitive advantage that I had was because I enjoyed it. I could do it longer than most people could do it. And it didn't feel like work because I liked it. And there's a whole bunch of different ways to find people. The world is so, so big that in most cases the world is plenty big for you to lean into the form of marketing you most enjoy and be able to draw plenty of audience to build a profitable small firm around. I got a really kind email the other day from somebody who had started down a path that was incredibly, incredibly specific. What was it? It was something insanely sp. Oh, what was. Oh, man. The sort of thing where you hear it and you're like, oh, I bet there's like three of those. And they're like, that was how I started out. And now I'm the person for those people. He just got a big juicy plug from an influencer in that space. I don't remember if it was a he. They. They just got a big juicy plug and they have like over a dozen new clients coming in in that very specific domain. So don't be afraid to. To put yourself out there, especially if that can sort of quell the anxiety of. Of quotes not doing enough. But also recognize that whole anxiety is kind of made up and one that you just sort of put on yourself. I've got that. I've got that demon in my head too. Third thought I had here. I kind of spoiled this one already. But if you look around at the other people who are running accounting firms, and this would actually be an interesting experiment to do, if you're able to talk with other folks who run firms that feel like they're at capacity, ask those people, what are the things that you wish you had the time to do because you're in a. And this is speaking more specifically to Don situation. You're in this very specific window of time where you've got bandwidth, maybe more bandwidth than you'll ever have before, Although that's probably a little unfair to say because we've. We've actually talked with a lot of accounting firm owners lately who started in a place of no bandwidth and have fought to get bandwidth back over time. But if you consider what those other firm owners grapple with, and they're like, man, if only I had time to invest in this or invest in that. See if any of those things super light your fire. That may be where you find the form of marketing that you really, really enjoy or that you learn you enjoy going to trade shows like myself as. I mean, I was so such a stereotypical accountant where I didn't know anybody outside of my firm. I wasn't engaging on social media. I didn't know anything about thought leadership. The only stuff I had on my radar was like, technical cpe. That was all that I thought that there was. And arguably for tax people, that might still be all that there is. But it wasn't until I got out of my little firm bubble that I started finding other stuff that I liked. And I could have never imagined Going to a conference in those days, in fact, the only quote conferences I'd been to have been to like annual gear up retreats where you sit in a freaking chair for two full days. They roll like C tier snacks by you all day. So you're constantly stuffed. You're just like waiting for the next Vern Hoeven joke. But it is, it is too really long days of hard technical training. And I thought like trade shows, stuff like that, I thought they were for the birds because that was my only experience with them and they were just so soul sucking. But then I started going to accounting conferences where I could meet other accountants and I found out that I loved that. And so if I actually went out and started a firm tomorrow, I would super, super enjoy going to trade shows and meeting people and getting a better understanding of the ecosystem because many people in that trade don't even go to trade shows. And showing up there yourself is actually a real fast track to becoming even more of an expert in some areas of that domain than even your clients are. And without the flexibility to do to explore that stuff a bit, I wouldn't have learned that. I enjoyed that and so much I've railed on this before. But so much about successful adulting comes down to learning what your competitive advantage is to the end that it is something that you enjoy more than other people. We chalk so much up to natural ability and it is this thing that we carry forward from childhood where there was the kid that was the really fast runner, the good basketball player, and 80% of their ability was natural. The good news is if you didn't have any of those natural abilities like I did, you leave that stuff in the mirror when you're like in your early 20s and when you're going to go work for another four decades. The Greater driver of success is not what you're naturally inclined to do, it's repetitions, it's what you've invested time in doing. And so when people come and watch my videos now and they're like, wow, you're a natural, they're saying that because I have spent more time on videos for accountants than anybody else in the industry in the last three years. And I would love to say that, yeah, no, it's all natural ability, but a lot of it is just because I've spent more time. And I think oftentimes we don't believe we have that much agency over the skills that we develop. But you really do. And the greatest gift a person can have is an inclination to a specific thing to, to really enjoy it. Because over the arc of years and decades of adulting, what you become prolific at is a product of what you're willing to spend time doing. And the only, the only, besides sheer force of will, which is not a thing that really exists over the course of decades, the only leg up you have on other people is, is this something that you love, that you really enjoy doing? And if it is, man, lean into that for the gift that it is and become prolific at that thing. And for me, and I think people even find this later in life, you never know what that thing is going to be until you do a bit of it, you experiment a bit with it. Maybe you would love, maybe you just love talking with people, talking with smart people. So you would love running an interview podcast where you get sort of the, the leading minds within a little space and run the first cool podcast for that very specific people group. Until you taste that stuff a bit, you don't know what you're going to love. And this is at least in Don's situations, this is a great time. Time to taste, taste the rainbow, as it were. This episode is sponsored in part by cloud accountant staffing. Do you ever wonder why offshore staffing agencies sponsor so much of my content? Because I'll be honest, it's not cheap. Like, let me just do some like, mental math here for you. Most of the brands, like software companies sponsoring my content these days, like, they're pretty kind of the bigger platform because, like, it's not the cheapest thing anymore. And so how can these little offshore staffing groups afford to advertise and advertise on my platforms for years? I'll tell you how. Because it's working. Not like the ads converting. I mean, the ads are converting, but firms are going to these groups and they're having fantastic luck and they're going back again and again and again. Cloud accountant staffing story they were an accounting firm that started hiring accountants in the Philippines. Philippines had fantastic luck with it and then like just started doing it for some other firms. And it is one of the fastest growing trends in running small accounting firms right now is the world's just getting smaller. You know how hard it is to find like really talented onshore accountants. For me, the last four hires that I made in my firm were all in the Philippines. If you want to work with a group that feels like an accounting firm that's going to help you find people, because that was truly cloud accountant staffing's origin story, it's worth checking them out. Linked Cas down in the show notes. This episode is sponsored in part by Ignition. Come, come, come, come, come. Here's the thing. Here's the thing about client billing. You can't bill for the time you spend billing. You can't, you can't. It is pure waste. And we're bad at billing because it's, it's icky. You let things slide. You don't get paid. You waste time. Waste time chasing people for money. That's not what I did. I would just, I didn't want to waste time chasing them and so I would just, I just eat it. Don't do that. This is where Ignition comes in. The leading revenue generation platform for accounts and professional services. When I was running my firm, Ignition wiped out our ar. It's true. And significantly reduced the time spent billing clients, saving our partners over a thousand hours in the first year because they didn't have to bill all that stuff manually. Man. With Ignition, we want more business with impressive online proposals. No more hustling, hustle and PDFs and Word docs. We automatically pull payment upfront or at the end of a job when it was done. No more dialing for dollars. We transitioned our firm to more recurring revenue and better managed scope creep. No more leaving money on the table. Ignition is making thousands of firms more money and genuinely made us more profitable. Check out why over 7,000 of the smartest businesses run on ignition@ignitionapp.com put a link in the show notes last. Bro, you don't just gotta work all the time. It's, it doesn't have to be about work. Consider. And I'm, I'm. This is who, this is the pot calling the kettle black so much because I am so entrepreneurially obsessed. There's nothing worse than like get togethers with parents and families and all that stuff. And I, I hear this all the time. There's nothing worse than those work obsessed people that just can't talk about anything at a party except for work or something like that. And I'm like, crap, that's me. Because I'm just such an entrepreneurship nerd. But it doesn't hurt to be a well rounded person and find some things and find some interests and have things that are not work. And this also gets like super wound up in identity. If you're a, if you're a business owner, it's really hard for your identity not to be wound up in business success. And it's such a trap. It is such a risk because there's so many elements of running A business that are outside of your control. I mean, if, if the IRS gets, gets abolished and they actually superchange the tax system and maybe in a way that sidesteps a lot of tax professionals, is that your fault? No, it absolutely isn't. If AI actually does come in and automate a whole bunch of stuff that we do overnight, is that your fault? Man, almost certainly not. And so it is such a risk to stake our own identities in the work that we do. The. I can tell you my, in my life, there's like a level of satisfaction and, and joy and all that you think that you're going to find by achieving that next work thing, when oftentimes the shorter path to satisfaction and balance is something that has absolutely nothing to do with work at all. So, like me having kids was the best thing that ever happened to my work. You know, going out and doing like, service stuff and helping other people, like there's, there is something, you know, giving to other people is such a rewarding thing. So the answer here actually may not be work related at all. That's kind of what we talk about on the podcast. But if you're finding yourself with an abundance of time, the answer doesn't always have to be work. Because, man, there's a lot of people out there in the world that need help, either with the skills that we use professionally, but even just like very basic things, like just very basic needs, not reliant upon your expertise, but just like, hey, we need a warm body that can help with this or that. That stuff is everywhere. And I'd argue the people that lean into that a bit and do that stuff, like, they are the more well rounded human beings with a more clear worldview, and that actually helps them to show up better at work. So that is to say, the answer doesn't necessarily have to be a work task. Right? But boy, I can tell you I super struggled with this. I've shared before. The fastest growth period in my firm was my most unhappy period because of just the trade offs we're talking about here, Don, because I was in this stage of my career or I was at a firm with a bunch of other alphas. And there was a very real element of like, well, I got to prove that I can do this in a way that nobody else can. And so you're kind of beating your chest and it's probably about proving something to yourself and proving something to other people. And you, you kind of push for these vanity metrics, but in my case, you end up making a bunch of Trade offs along the way from not letting the right clients in. The worst part was not letting the right employees in or letting folks on board that never should have been on board because we needed the bodies just to service the work. And I found so much joy when I stopped doing that. When we paired it back, the thought experiment that every single one of us do every night where it's like, what if I just cut this in half? And I would. I would have 80% of the profit and 20% of the headaches because I would cut all the headache clients and staff and all that. I kind of did that to a degree. And I'll tell you, it's true. It really is. Like, it's. It's a much more satisfying way to turn up to work when you're turning up working with the people that you really, really enjoy, but to do the opposite and to grow really fast. Not only is it probably not the right business decision, but you're also probably not doing great by the other people that you involve in that. From the clients that you pick up and then ditch 12 months later to the staff that you hire to do that work, and then you cut them loose because they weren't the right fit. Everybody kind of loses in that situation. It is just, it is so important to always be considering the why behind that driving feeling that you're feeling inside. Oftentimes it comes back to trying to prove something to someone who doesn't give a crap about you, a past employer, somebody in your, you know, in your family. It is like, it is so, so important to dig into. I, I have this like, fire inside of me that I can use in, in really good, positive ways. But I can't let it go too far because if the only reason that I'm doing this is to prove something to somebody who just doesn't even care. And this is, this is also like coming from a, you know, child of traditional sort of boomer generation family, you're like, man, you know what, that, like people at home, like, don't make them pay the price. For you trying to prove something to somebody else, it is worth trying to be like hyper aware of. I'm feeling this fire. And that's not necessarily a bad thing. But why am I. And if I'm leaning into it, what's, what's the purpose? At the end of the day, kind of the best part of running a small accounting firm is, is having total agency of how much you want to work and being able to craft that whole thing to your own design. And so if you build it for somebody else, you build it to prove something to somebody else. Like, man, that just sucks, right? Like, that kind of. That kind of defeats the entire purpose of finally having your own thing that you can do whatever you want with. But it is hard not to lose track of that. You got any wisdom here? Drop that stuff down in the comments. If you're listening on the audio feed, there will be a link to the YouTube video. Click through there. Drop a comment. Really good stuff happens in the comments of these. Of these po. I'll see you in the next one.