500 This $100k Solo Bookkeeper Is Facing 5 Problems

This solo bookkeeper is going to run 100 grand in just their second year since launching the firm. But troubles in paradise. Five problems we're going to work through. I'm going to tell you the story of how they got here. Cool success story. But also work through the problems they're stuck on today to get to something even better. Because if you're on a solo accounting firm, buddy, actually, let me tell you, in 2025, there's a lot of opportunity out there at 100 grand. We are just scratching the surface. Come on in, let's talk about. All right, this is a firm who anonymously submitted a bunch of information to me. You can do the same. There's a form down in the show notes. Basically what we do is it's an opportunity to kind of put our coaching hats on, look at another person's firm because it's much easier to like, pick apart what they're doing than what we're doing. But it's a fun exercise to think through, just kind of more general firm strategy. Anytime we do this, it almost feel. I mean, you almost feel. I don't know if bad's the right word, but we will talk through, like, what are the things that we can do better? But let's not, let's not forget these people, they had the stones to go out and launch their own firm. They're crushing it. I mean, so many of these we do where this person's like, oh, everything's awful. I'm on the edge. And they're making like 400 grand a year. Right? Something that five years ago they never could have imagined. It's not to say rich people problems aren't real problems. But let's not forget, counting for money is pretty rad. Entrepreneurs, right? Okay. This firm, they are just a straight up bookkeeping firm. And their first year they did 54 grand in gross revenue. And their second year they'll do a hundred. They're in a pretty small town, but are about 30 minutes from some bigger markets. Currently, they just provide bookkeeping services. Each client gets assigned a day of the week where they do their categorizing monthly reconciliations and send the monthly financials off. They recently began studying to become an enrolled agent and will hopefully start adding tax services by the end of the year. We're going to circle back to that. Is that a good idea or not? They're trying to network more into this larger city, about a tier two city that they're near. But they say they've been getting in front of a lot of small businesses that end up fighting them on their $250 per month minimum, which is exhausting. So their minimum price for bookkeeping services, 250 bucks a month, but they still got people fist fighting them at that price. You better believe we're going to talk about that. Worth acknowledging there will never be a price solo that somebody doesn't fist fight you. And so if you're getting pushback from clients at whatever price that you're at today, it's not because you're up against some absolute force of nature. It's because the client yet doesn't see the value or the specificity in what do ultimately people make buying decisions based on the roi. They think they will get the value they assign to the work that you're going to do. But then they will also look at substitutes to say, can I get this work somewhere else for the same price? And so if somebody's comparing your bookkeeping pricing to, well, my mom used to do it for me and I didn't pay her anything. I bought her dinner once a month. Then the problem is they think a substitute to you doing the work is their mom doing the work. And so you have to show them why you're doing it a higher level. You're bringing more to the table. And you didn't breastfeed them as a child, so you're probably not as willing to do stuff for free. Okay, Specialization. At the moment they don't have a specialization. My family owns a real estate brokerage. They have some real estate related clients and they've been considering picking health care, dental and real estate as their niches. That I would call those niches. That's like half the GDP of America. Their bachelor's is in public health and they have connections in that field. Bingo. So between those areas, they feel like they have the passion and connections to grow. Great. So they got something they're passionate about. They're already ahead of most accountants. It's a bad joke. Accountants are passionate about things too. You know, like warhammer stuff and cross stitching. Okay, I can say that because I'm an accountant. Chill out, guys. Come on. It's fine. Pricing. They use a pricing calculator from the bookkeeper launch course that they took a few years ago. I don't know what that is. Their minimum is 250amonth and their highest paying client right now is $1,000 per month. They struggle with their pricing right now. They get clients through physical networking through BNI groups. I've ever heard it put that way. Before physical networking, at least not in our industry. And word of mouth. They'd like to do a lot less of this and lean into social media. Their fiance does social media marketing. She's going to start working with them next month to grow their social media presence. Their tech stack, it's very good. They're using Keeper, qbo, ignition, Google for meetings, loom for deliveries, calendly for meeting bookings. Great workflow looks pretty normal. They say they are having a hard time getting all the reports delivered by the 15th of the month though. Okay, five issues. The big pains they're working on. By the way, good for you. There's a lot of people for whom what this person's doing right now. There's a lot of folks who listen to this podcast for whom that is their dream. You are living the dream scenario. But there's also a lot of people that run bookkeeping firms that are like $100,000 bookkeeping for this little itty bitty baby. The accounting firm ecosystem. I mean, it is like it is a big old food chain where there will always be people bigger than you, There will always be people smaller than you. Just don't be a jerk about it. I can tell you in my family, and I didn't, it took me a long time to realize this. There is not a single other entrepreneurial person in my family who started a business in my extended family. And it took like three Christmases of me just feeling like I must be a weirdo before I realized, oh, I just see the world in a completely different way than like employees of other companies do. And once you're red pill to that and you, you like, you're like, oh, I can just go out in the world and make money. Man, that's so cool. Cool. Once you have that power, Most people around you, they do not have that power. This person has that power and they've developed it in the last two years. Got a healthcare degree, said, I know what I'll do. Start a bookkeeping firm. Good for you. Now, the five pains they're stuck on and how to overcome them. Number one, general organization and trying to get as much work out the door as possible. Let's start there. Their exact words are, I'm constantly trying new things to optimize my workflows and tech. I want to be as efficient as possible so I can scale. Here's the thing about this person. They have a fantastic tech stack for doing this work. But you know what? They have uncertainty because they don't know if it's the Right. Tech stack or not. Right. This is a big misnomer with how we choose our tech is we think that one day we'll get to a perfect tech stack and then put all that stuff out of mind. What I think we're actually looking for is confidence. That's what we're in the market for. And I don't believe you can truly have confidence in knowing that you're on the right tech stack until. Not like, you get your tech stack just right, but until you know other people who do what you do and they're like, oh, yeah, you got your tech stack right. This is, to me, this is the power of a peer network. Do I know a bunch of other solo bookkeeping firms? Right. If you don't, then how will you ever have confidence in anything that you choose? This person, they're in a great spot, they're using the right tech. But it just goes to show you that even if I went through and I picked your tech stack for you, you would get to the other side of that and still be, like, looking around at the other options. Is that better? Is that better? And so the solution to this, it is a peer network. You build that, in my opinion, Go to local events, meet other folks that do what you do, go to conferences. The easy one, though, to me, it is. It is online communities. I run an online community, realize for exactly this reason. It's got 600 firms in it. It's got probably 60 solo bookkeeping firms in there where it's like, you don't have any of these relationships right now. That's like the sole function of at least my online community. It's not access to me or thought leadership or anything like that. It's just access to peers. Because that, I mean, that was like the most powerful thing that I ever got. That community realize it's always linked in the show notes of these episodes. But that, to me, is the solution to number one here. Having confidence in your workflows is being able to see into what your peers do and know that you're on the right path. It may not be perfect, but you at least know what other options are out there. Second pain, they said they also have a difficult time when they face an issue they don't have the answer for. They end up spending a lot of time on one task. Since they're alone in their business, it can be isolating and hard to find the answers they need. I teed that one up pretty good for me, right? What. What's the answer to that one altogether now? Peers, knowing other people that do this stuff, being able to chuck that answer out and get a quick response. Absolute game changer. Especially for solo folks where you don't have anybody else you can bounce that off of. Right? Third pain pricing is a big one, they said. I struggle with knowing how much to charge and I'm constantly undervaluing myself due to the fear of clients turning me down. Listen, if you ever figure out how to get over this, tell us all how to do it. But I can give you a couple best practices and share kind of on my journey what helped me here so our natural state is to dwell on the folks that complain the most. The folks that are bent out of shape about our pricing. We give those folks five times as much headspace as the very happy clients who are paying you top dollar with a big smile on their face for some reason. Why is that? Because for every client that's a D client and wants to pay you less, you probably have clients on your client list who would happily be paying you more. And so one easy unlock here is to always use three tier proposals and they're using Ignition. So this is really easy because Ignition does this well. The reason why you never give a client a single price is clients have different willingnesses and abilities to pay and by giving them three different options they're self selecting into what they are willing and able to pay. Now the biggest trap here is folks will stand up the Bronze Silver Gold plan based on scope, that is how much work it is. I think you need to stand that up based on how premium the service delivery is. So are they first in line at the end of the month to get done or are they last in line at the end of the month? And you've heard me. We're going through a whole series on the podcast right now of like what are all the different ways to dress up your services in more and less premium ways. But this is the reason why you never give a client a single price. Every time you do you're leaving money on the table. So super recommend three tier proposals because the folks will happily pay more then you capture the fact that they would pay more. So if you're going to do annual renewals at the end of the year, you will find you will unlock a whole bunch of brand new profit from clients that you didn't realize were happy to pay you more. Now also recognize you will always struggle with this. This will always be a thing. And so a big part of the accounting firm game is always being mindful of who your a Clients are and who your clients are. Your D clients are the ones complaining about rates. And 12 months from now, they probably shouldn't be clients anymore because you want to be doubling down on today's A clients. But the really easy thing to do is a big trap is because those D clients are complaining. They get in the way of you building the firm that you need to build for your A clients because you're afraid when you make that change of what the clients will say, right? In fact, even think about increasing prices, what does your mind go straight to? Go straight to the declines who are complaining. Why are we building the future version of our firm around our very worst clients? Super easy to do. I mean, I am. I'm saying that because that's what I got wrong big time. But as your firm continues to evolve, those A clients, they're tomorrow's B clients because you just found a new, even better type of A client. So just recognize this is a big part of the game. In fact, exposing yourself to this pain and these hard conversations is a really, really good thing. Cody Sanchez is like a sort of small business thought leadership online, and she thinks just a really, really big part of small business ownership and being an entrepreneur is being able to withstand increasing levels of pain because the more you do it, the easier it gets, which means you're now capable of taking on even more painful and more ambitious things. Things. And it's not a very sexy outlook on entrepreneurship, but that is kind of the reality. And if you even think about where you are right now, when most of the people in the world, they work for somebody else, you're already bearing more pain and risk than those folks are willing to do because you're running your own business. And so don't be afraid to lean into those hard conversations and recognize that is the path forward. Now, there are great rewards to that. And the beauty of, like, being in total control of what you're doing rather than someone else being in control of your destiny. Right. Downsides to that for sure. Also, now you're the only one to blame rather than being able to point at the boss and be like, no, I missed the piano recital because my boss said I had to work. Now it all comes down to you. And there's a whole lot of sort of existential struggles around. Well, then what's the right thing to do when I have total control of my time? But I would much rather play that game than play somebody else's game. So don't be afraid to lean into those painful conversations. Recognize they'll get easier the more you do them, but they're an essential part of you becoming a stronger entrepreneur and protecting your business from the bad clients and ensuring you're building for the good clients. This episode is brought to you in part by Stanford Tax, one of my favorite new tax like AI tax workflow tools. Stanford Tax actually heard from a big number of you very happy users. Stanford continues to evolve, and one of the big shifts in 2025 is that is it is now not just a tool for, like, serving as a portal for your clients to submit information into, but it's also just an internal tool for your firm now because it does so many useful things with those source docs. So basically, you pile in all that info that the client gave you and it will compare those items against the pro forma checklist that it generated and tell you, okay, what do we have now? What do we still need? But it will also bookmark those documents, it will rename the documents, it will warn you about stuff like it being the wrong tax year. It will split bundled documents, so if they give it to you in a single PDF, it'll figure out how that ought to be broken out. The number of years I was putting like divider pages in and sitting in front of that scanner, if you know, you know. And Stanford now rolls all that up into a binder in the cloud where you can do your PDF annotations right there inside of Stanford Tax. Okay? Down with Adobe Acrobat. The world doesn't need us drawing more red squares in Adobe Acrobat. Okay? This excites me because it's pulling all this stuff into the cloud where every new AI model makes this whole workflow better. That's super exciting. To learn more about Stanford Tax, check out the link down in the, in the, in the, 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 A.R. 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 build all that stuff manually. Man. With Ignition, we won more business with impressive online proposals. No more hustling, hustle and PDFs and Word docs. We automatically pulled 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. Okay, two more pains to go here. Pain number four. Another area I'm having a hard time with is the enrolled agent decision. How do I scale from bookkeeping to bookkeeping and tax? The way this is worded and the way the EA thing is discussed here is there's a certain, like, inevitability to it. Like, it's an obvious answer to go from bookkeeping to tax. There's culturally this notion among some, definitely among tax people, many tax people, that bookkeeping is the inferior work to tax work. Some bookkeepers buy into that, others do not. But like, many bookkeepers are like, oh, tax is kind of the more premium, the more respected work. So I should just try to get to that. It's worth recognizing if you add tax work to your firm, you're introducing a huge amount of complication. And you'd have to have a really good reason to do this because there's a lot of very big, very successful bookkeeping only firms out there that point to the fact that you can also just do bookkeeping. And sometimes our decision to get into tax is because we may talk with a few entrepreneurs that are like, can you just do my tax return too? And you'll be like, yeah, no, we should figure that out. We should figure out how to do all that stuff. But I'll let you in on a secret, is that as soon as you start doing their bookkeeping and tax, there will still be another thing. They will say, oh, can you do our payroll too? Can you do this? And that too. Being exposed to more people and doing a good job, like, folks will always be asking you to do more, and it's our jobs to kind of push back on that. So I wouldn't think of this by any means as a foregone conclusion, as if every bookkeeping firm should get into tax work. Work. But second here, I would also not give in to the notion that it is you that has to do the tax work, because it is very hard to be good at multiple things. Getting your ea, in my opinion, it does not make you good at tax. It for sure unlocks some stuff like, you know, representation and things like that, but don't buy into necessarily the idea that you have to be the one to do the tax yourself. There's a lot of folks out there that run accounting firms that aren't even accountants. We've had several podcast episodes with Patrick Dichter, who has acquired now three accounting firms, but he doesn't have any expertise. Not, not like explicit accounting or tax expertise, but you can still employ people that are those experts. So you don't necessarily have to be the one that has tax tax expertise if you're selling tax work. In fact, this is a big blocker to many small firms is we come of age in our own firm as the biggest brain expert, and we can never get past that. In fact, we can never trust other people to ship work that we haven't reviewed. And then as our firm grows, like, we just have more and more responsibility on our plate because we're having to filter everything through us. But there's absolutely another path where you don't have to be the expert. You still have to have expertise. The work still has to be done correctly. But it is a uniquely small business problem to think that I have to be the best person in the business at every single thing. And then you're kind of setting yourself up for wearing a lot of hats, for not being great at any one thing in particular, because we're trying to do too many things. And oftentimes that gets in the way of how we think about building out the team because we're like, no, I just need something that's complimentary to me here. When it's like, is there actually a talented person out there that could run with this part of the business? And that's a scary thing. I don't want to act like it isn't, especially in the early stages, but just know committing to getting good at tax, boy, I mean, I think so. I started my career in tax. I don't think I was probably seven years in when I was to the confidence level of being able to, like, comfortably discuss tax matters with clients. Like, it is not trivial. It's tricky and it depends on the complexity of the folks that you're serving and all that. But if you're working with business owners, you're walking into stuff that's not necessarily straightforward. So all of that is to say don't feel like it's at all a foregone conclusion that you ought to get into tax. And if the people that you are working with are just asking you for tax or saying that they will only work with you if you do tax, then consider why there's so many other bookkeeping only firms out there. The more scarce and specialized we are, the more leverage we have over that conversation. And so if we're just comparing you to that person's mom that was doing their bookkeeping before and there's nothing unique about our expertise or anything like that, then they're going to make buying decisions based on the breadth of services that you offer. So all else being equal, there's another firm across the street, they'll do bookkeeping and tax and you'll just do bookkeeping. Then they're going to go with the one that will do both. But that is not a reason to do both. Because once you do bookkeeping and tax, what's the path to running a better bookkeeping and tax firm serving a more specific type of client? And you can do that where you're at right now just doing bookkeeping work. Now a lot of other stuff goes into that, like do I want to be an expert in this stuff? Like is this a passion of mine? That should also factor into it, like what is the right decision for you? But from a business standpoint, don't feel like you have to do that. Last pain number five, they don't like networking, physical networking like BNI and how much time that takes away from their daily or weekly tasks. Now they said they wanted to get more into social media. To be clear, the things that are blocking your business right now, they will inevitably require this time and attention. So there is no path to building a business that doesn't require time and attention on non work related items. So we can't stop doing networking just to be able to do more of the bookkeeping that is like hamster running on a hamster wheel doing the same thing until the end of time and expecting to get to a better result. Building a better business starts with spending time on things that that are not work, unfortunately. And social media may be a good example of that. Now this person, they've got a background in public health and connections in that field. That is great. There are umpteen like there are a million different specializations within public health. In fact, on a past episode we talked about what was the certification of it's like a certification for people who repair medical equipment. And we looked at like, you know, the average revenue for these businesses was like 2 to 6 million a year, something like that. They all convene at these big conferences every single year. I'm like, man, that looks like such a great specialization to get into. Don't specialize in quote, unquote, health care. I mean, that's way too vague, right? Like, how many different types of specialists and support businesses and all that are there within health care. You don't even have to think about working with the people who deliver the health care. Like, think about all the supporting companies in the whole ecosystem of health care delivery. Any one of those are enough to build a killer practice in. And every one of those pay better. I don't want to say everyone, most of them will pay better than the clients on our client list today that we're fist fighting. I mean, these people will cut $50,000 checks like it's nothing. So look for an opportunity where you have a connection. You can get that first project. But also keep, like, keep your kind of eyes open to look at what are the different opportunities within health care, especially if they align with stuff that you're interested and passionate about. Go to some trade shows, have conversations with those very nuanced specialists. Because the beauty of accounting and bookkeeping is everybody needs accountants. It's kind of cool. It means you get to marry the stuff that you're into with your business and what it does. And if we run away from that man, it just misses out on, like, a cool opportunity. The whole, like, don't make your hobby your job. I just think that's when it comes to accounting, I think that's terrible. Life advice. You're going to go out and start your own business and then actively run away from the things that you love. For sure. You can find things that you're passionate about through work. And by doing that work and becoming good at it, then you become passionate about that. But, like, the reality is, for most folks, they don't know where to go. And so if you're looking for a place to start, start with stuff you're into, where having those conversations and reading about it and learning about it wouldn't even feel like work because you love it so much. So bni. BNI is a tough slog. I wouldn't be rocking up to BNI stuff. I would be going to trade shows, much more nuanced spaces and learning how to support a specific type of entrepreneur. Though you do say you want to Work more on social media. I would say, like, find the version of thought leadership that comes naturally to you. If that's not in person stuff, then is that writing? Is that, you know, talking with people? If you enjoy talking with people, doing interview podcasts, there's so many different flavors of thought leadership that even the folks that are like, I don't want to get on camera, I don't want to be visible, I don't want to be known, there's a version of thought leadership that's accessible to almost everyone. Because even if you're not into public speaking or dancing on a TikTok video, most of us still enjoy, like writing or research or putting together tools that are useful to these people. So if you can find the flavor of that that you enjoy, then that's a great unlock for you, like going out and being visible. That is how people know that you even exist. And the Internet, that is a massively bigger platform than rocking up at a BNI meeting, particularly as we're serving a more niche type of person. That's the power of social media algorithms is they can find everybody that does a very, very specific type of thing. Whereas you'll go to BNI meetings and never meet a single person that does that sort of thing. Right. So I'd super encourage you to get more specific. The folks that are complaining about $250 a month, let's see, what's the price of QuickBooks Live bookkeeping right now? Last I looked, I think QuickBooks is bookkeeping service started at like $200 a month. But again, there is a huge started at sort of asterisk on there. Looks like they don't even give you a price anymore. But somebody's complaining about pricing like that. I mean, there's productized services online that deliver a very low quality of service. In fact, anybody under four or $500 a month, I would say send them to bench send them to QuickBooks Online Bookkeeping and say, if you really want to pay this little, go and work with a service like this. In all likelihood, they won't. Especially if we can confidently explain how our service delivery is different than these productized services. So for one, they're not getting chucked into like this pool where you don't actually build a relationship with anyone. They are building a relationship with you. Like, you are the one supporting them. Like they have a friend in the journey that's looking out for their business. But I find pointing people to services like this readjusting their understanding of the market to say, like, okay, Now I see, like, these cheap sort of turnkey services are actually 200. Actually start at 200 to $300 a month, as opposed to what you deliver, which is much more personalized and customized to my business. Of course, that is not going to start at 2 to $300 a month. And then you don't have to look like the bad guy. You're like, this is my place in the market that I confidently fill. Obviously, you haven't brought your head around to the true cost of what you're looking for yet. If you really just want to pay that, go over here and I'll probably see in a couple of years and have to fix a bunch of your busted stuff. Right? But zooming out. Good for you. Hitting 100k in two years. There's so many people listening to this right now who would kill to be in that position. Good for you. Keep up the good work. If you want to have your firm roasted, that was the initial framing of this is Roast My Firm. You want to have your firm potentially be roasted? Check out the firm. The form down in the Show Notes takes 10 or 20 minutes to submit some anonymized information to me about your firm. And we'll just kind of riff on what we're seeing and the best of what you're doing and. And where we could potentially improve. Gang, thanks for being here today. We all got a little bit better at running an accounting firm today, right? All right, catch you in the next one.