584 Coaching 16 Accounting Firms on PRICING In 52 Minutes

Hey podcast friends, you might have heard that we're about to start our 20 city US tour happening this spring in May and June. I guess we got a couple of months, right? These events are gonna be really good half day workshops and I wanna see you there. And to get you excited, we put together a cut of clips from the last workshop series that we did last fall. Specifically on questions from real accounting firms around how to better price their work. To not commit themselves to just doing more work, but to get paid better for the work that they already do. These questions are going to, are absolutely going to hit home. It's a good example of the really high quality conversations that we had out at these workshops. Should be some good nuggets in here that will help you price your work better than ever before. Let's get into the Q and A stuff. I want to talk three tier proposals. Pricing any of the stuff today that you're like, I'm still struggling with how to stick the landing on xyz on the very beginning of the journey. When you're first starting out right and you're trying to figure out what to price, do you try to stay, you know, pricing high because you want, you want to set that expectation or do you start actually with like some rock bottom prices to get the clients in the door to learn to iterate? And then I've got her problem two years from now and then I figure it out versus waiting around for clients that are going to pay me X amount when I'm still kind of new and getting started. You know, I've got two clients right now, like to get number three shopping price in at 200 bucks instead of 800 bucks for a month, like that type of question. So it depends on like, do I have access to more clients? We've had stories come out of these events where you've got a dude that's like, yeah, I'm trying to like get enough clients to go on my own by April and they leave this event with more clients than they can possibly help. So that's a factor. Like, and this is the, honestly, this is the highest context room you'll be in this year around like minded folks. If you've got legacy clients that you know you need to get rid of, like have those conversations tonight to have a few referral partners, that's gold. If you have a situation like that, you don't really have to take discounts because in all likelihood many of the people's clients here who they're happy to get rid of, those are probably Pretty premium rates still for a new firm. If you're at a situation where you got to pay the bills, then you got to pay the bills. So it's definitely a sliding scale of, like, I could go cheap and attract more people. If there's one, like, word of caution I'd give you here, it's that price oftentimes isn't what's going to get more people in the door, the folks who would find you anyways. It's actually not that common, in my opinion, that, like, if I went down to 200 instead of 400 bucks, that's what makes them say yes. So I think you got to stick to your guns to a degree, but also recognize there will never be a day where your evolution stops and you don't have the exact same problem you're describing. Now. All the seasoned people in here that have clients to get rid of, they're dealing with the exact same thing. All the, like, premium things I just described around, like, access to you and turnaround times and all that everybody's going crap, I've been giving that away because the only thing I've been scoping is the work, not me. So now I got to get me back. And that will continue to evolve year over year. It always will. When you're starting your firm, your availability and the way that you help people will never look the same as it is when you're five years into your journey. Right? But the Same applies at five years to 10 years, to 15 years. Like, what you want to do, who you want to be available to. That's always changing. Where people get stuck is when they're afraid to, like, either move those people along who are no longer a great fit for the firm, or change the engagement to say, here's what my availability looks like now, and I know it's not as available as it was. Maybe it means working with my team more. But that evolution, that whole thing, that's the process, that's the entire journey, year after year after year after year. The value of doing annual proposals is you can say, here's the contract for the next 12 months. Here's what we're agreeing to. The problem a lot of us have right now is, like, we have this expectation and perpetuity of, oh, I'm just always going to be the guy. I'm just always going to be your tax, Eddie, whatever. And they think they're going to have that until the end of time. That's part of the value to me of, like, resetting expectations every 12 months as I can kind of continuously reel that in where I want to, to control my time, bit of a sliding scale, make the most of tonight for sure, and try to build some referral partnerships. But there's nobody in this room that isn't dealing with a version of that. Like, you're not going to go build your hundred client list and be like, this is it. I'm going to take these to the grave. In fact, that's kind of like the worst case scenario. You know, like that's where folks get paralyzed, is when that client list kind of stagnates.

So if you are doing an across the board annual increase, you know, say, let's just say 5%, and you also have a monthly minimum, are you also equally increasing that annually by that same 5%? Because otherwise it seems like those clients that stay with you loyally are getting dinged for staying with you, as opposed to the newbies that come in and they come in at that minimum, if the minimum is what they end up with.

So can new people come in at the minimum? Is that kind of the question?

Well, not so much can they come in at the minimum. It's that. Shouldn't that minimum, I guess, increase equally like the 5%? Because you get a new guy in and they're coming in at your, say, your $500 minimum. And last year's guy came in at 500 and now he's going to go up to the 525 or 5, whatever. So the new ones are kind of getting a break. But your loyal customers are. I'm just wondering, do you equally increase your minimum the same percentage that you would increase your existing clients?

I guess I kind of just think of it as a lever that can be pulled to balance how the firm's feeling, you know, because like, if somebody leaves or if you get a couple great hires, that probably changes the equation a little bit. And my firm, the minimum for somebody coming in wasn't the same as the minimum for someone we were willing to retain. I would never bring a new person in at the minimum because they're already like opting into the thing that I honestly don't even want and don't plan on supporting long term. Right. Because your minimum will keep going up. So my minimum for a new client was like basically 2x the the minimum for returning clients. But in my opinion, I would say that the answer is more just like, think of the minimum as a lever for how many people do we want to support next year? And who do we want to support? And we may feel A little bit differently year to year on just what our appetite is for that or not depending on factors that are in or not within our control.

Another sales question regarding at what point do you reveal some price to kind of weed out people that won't even meet your minimum? So I don't have a price published on the website. When someone books a intro call, I send a pre call email prep that says something about like our prices are good for people selling at least a million dollars or something like that right online because it's E comm. And then during the intro call I don't real a price. Tell them after the discovery call you'll get a proposal. Say I get along that whole way, do the proposal, send it out and they're like, oh my gosh, it's more expensive than I thought. Yeah, I wasted a bunch of time, right? So without getting them pegged to the minimum by like saying oh my minimum is a thousand or something and then they're like, oh, I hope mine's 1250, right?

Yeah.

What, what's the good point to reveal that without like publishing it openly?

I would say the only universal truth here is to never put your minimum on your website because then everybody that comes in thinks they're the minimum. Either put it on your website or put it on the auto thing that they get on booking. So if I'm going to put something on the website, what I'm going to put is here are some example clients, the sort of clients we want more of. And they're not at the minimum. They are like these are the A and B clients that we want to attract more of. Here's kind of the demographics of what they do and the problems they feel. And here's a range or an exact number for what they pay. So you explain sort of these client avatars that you want to attract more of and what they would expect to pay and they should be nowhere near your minimum. That's one way to do it if you want to do it direct on your website and infinitely better than showing a minimum. The other way to do it is in that auto thing that they get via email. When you book is in a perfect world when somebody's coming to talk with you, they've gotten some value from you already and are a little warmed to like what you do and whoever they're going to talk to. So sometimes if you just have a price up that can spook them. And I can see an argument for giving them something of value in the confirmation from the meeting booking. So that they're then a little less spooked by whatever price you reveal there. So like if you have a valuable asset or a lead magnet or something like that to where when they book the meeting they get that and they're like, dang, this is cool. This actually solved a problem for me already. And then you reveal the price as part of that deliverable. I could see an argument for that. But it should never be later than that for the reason that you just described. Otherwise you're gonna end up wasting a bunch of time when they had that big ta da moment of what the price is, and we've all done that before. I mean, for years people did this. At the end of the project you would send them the hourly bill and they're like, what the heck? And now you gotta figure out how to get em to pay for what you already did.

Okay, so one of the challenges that came up in several of the working sessions was how to digitally represent yourself in the world of accounting today. So setting an example here, word of mouth firm starts receiving some feedback that they're not producing enough content, maybe to seem reputable, maybe educational content, blogging, newslettering, most of it's still just very human. Contact phone. If you had 90 days to step into that digital marketing, what would be the three things that you would recommend to a firm and then the three tools to help them initiate that? And again, word of mouth firm doesn't do any external marketing desire to enter into that space.

Okay, so three things and three tools. First thing is something of value on your website that they can swipe where they build a little bit of trust with you. If you consider a referral, who's coming to you very warm, they don't care all that much about your website. They're gonna call you almost no matter what. Cold folks showing up to that site, they're like, how do I know you from anybody else? When you're having a call with somebody, the hardest call to have is the one where they're totally cold. So how do I give them something where they see a bit of my expertise? We build a bit of trust before we even have that first conversation. So a lead magnet that solves a pain that's specific to them, that doesn't even require tech. I mean that can literally just be a PDF that somebody downloads, like it takes them to a Google Drive. Second, I would say right now, if you're gonna do anything on social Media, I think LinkedIn is just head and shoulders above anything else. If you're going to spend any Time on this stuff. The trap is folks get like stuck in vanity metrics and they are worried about not doing numbers. The reality is there's 20 times as many people at least watching and reading as are engaging. And all it takes is a microscopic number of people finding that stuff to change your firm. It's also almost becoming sort of the, like, the website became like the business card for your business to show its legitimacy. I almost think we're a step past that now where legitimate legitimacy is. Do I see them talking about this stuff anywhere else, like to kind of prove their expertise? So I'd say LinkedIn Authored up is a fantastic tool for LinkedIn for scheduling stuff. Third one, honestly, I would say an AI meeting note taker because to the point of what Geraldine was talking about, the more we can pull the client experience and how the client talks about what we do forward into our marketing and their questions into our marketing, the more relevant it is to them. And the unless it is accountant speak, the easiest way I've ever seen to do that is notetakers, right? So like my whole team is meeting with clients. They're all collecting questions like, how do we pull all that stuff out and use that in our marketing? Somebody's going through onboarding and they're talking about why they chose us. Like, what are the words that they use and what are the problems they have right now that made us a great fit for them? Cause if there's one of them, there's a thousand more. So I would say I don't know what this action is. I would just say taking the time to go through that stuff and pull into your proposals and into your website copy and into anything that you put on social media. More language that they use and kind of better learning their vernacular.

Hello, this is kind of more. So I've watched like your packaging and pricing and I think it's just a mindset shift that I need clarification on. Because when we're talking about like gold, silver, bronze and making all the, like, deliverables the same through the packages, right? Are those deliverables the same to every prospect that you give them to or those deliverables change depending on that prospect's needs? For instance, I deal with a lot of construction and service trades. They don't all need payroll, they don't all need job costing, they don't all need AP and ar. So I guess, like, if I'm presenting a proposal to a solo $500,000 a year contractor that doesn't need any of those things, do I Have gold, silver, bronze with just those core deliverables and then the add ons. But that would be different from my $5 million firm that needs all those things.

That's a great question. Yes. So my take here is that the scope ought to be just what they need on all three tiers. But then you come over to your $5 million client and it looks very different. One thing that's required here is sometimes the whole three tier proposal where scope is different in all three, allow for a lazier discovery process where you're like, you decide how much you want us to do for you. We may have to go a little deeper in that discovery process to actually have an informed answer of here's what you actually need, here's what I would actually recommend you use from us. And so we have to get to a specific scope before sending over the proposal rather than it being bookkeeping. Bookkeeping plus payroll. Bookkeeping plus payroll on bill pay. Right. Or tax or whatever it is. So yes, that will definitely look different for different clients. I've never been a we have three flavors that we sell to everybody kind of guy. You can definitely get there. It's kind of to what Geraldine is talking about. It requires a lot more specificity in who you serve and doing less. But for most of us across the entire firm, it is more than just three options. One thing, we didn't touch on it much. There's a balancing act here of what are the projects that we price in bulk and what are the bigger dollar projects that we do that we like pay some love and attention to each one of those individually. Those are definitely two different things. Things you doing tax work right now, you got a lot of 1040s you're trying to get out the door, buddy. Have I got the app for you. Is this episode sponsor Soroban. If you do 150 or more 1040s a year, you need an AI 1040 intake automation solution. Vastly better than Cognito Forms or the paper organizer or anything that a practice management system has on offer. Right now with Sorban, you just dump all, all the docs that your clients are giving you into Sorban. It goes through a checklist of all the things that you should have for that 1040 based on pro forma data, automatically checks off all the items that are in those documents and gives you like an intelligent portal you can feel good about putting in front of your clients. That will save you a tremendous amount of time in organizing all the information that you're getting in and figuring out what you have and what you still need and following up with clients, automates, all of that stuff. A tremendous tax season time savings. We are in the thick of it and this is where Sorband's gonna save you a tremendous amount of time. I know tens if not a hundred plus firms now that are very, very happy users. To learn more about Sorband, check out the link down in the show notes. Hey, real quick. Some very cool new updates were just shipped by one of the leading practice management systems in my app recommendations, this episode's sponsor, Financial Sense. So if you do bookkeeping work or client accounting work, this is worth checking out. They're building some month end close automation features into the practice management system. So stuff like handling uncategorized transactions, flagging transactions without payees, without class, without location expenses and bills without attachments, inconsistent expense classification, large transactions. It will now flag all of these items inside of a month end close in Financial Sense because it's syncing the actual Ledger data from QuickBooks Online to Auto flag these items. Really cool. Some stuff that you've only seen to date really in like dedicated workflow tools. Financial Sense now, which is a practice management system, is pulling some of the best of that workflow into the platform so you can do it all in one place. Pretty cool stuff. And I got a discount code for you. If you sign up for their team or scale annual plans with two or more users, you can use code Jason10 to get 10% off. That is Financial Sense doing some cool bookkeeping automation stuff. To learn more about them, check out the link down in the show notes.

So my question is about the three tier proposal and how do you get started with existing clients and getting them into this three tier. I mean when we've been doing this so long. So it's not so much the price raising and things like that to scare me. This is more so just getting started on doing something different with them. With this three tier proposal thing. You just jump in, just do them all at once, do them once at renewal. Like what kind of process should that be?

I start, I would say start at renewal time. That's the most logical place to start. You don't have to start with 100% of your client base. In fact, I think I mentioned Geraldine Carter earlier. One thing she talks about in her content is actually testing with this with subsets of your client base because it may feel like a really big roll of the dice to put three tier proposals in front of everybody or a totally new price in front of everybody. You're like, what if everybody says no, that's a problem? What if everybody says, yes, that's also a problem. So she talks about actually rolling this out, like, 20% of your client base at a time. Test it with 20% of your client base that you think are, like, compliant people, and we'll kind of go along with it, see what they say both about the process and what they opt into. If 10 of those 20 people opt into gold, that next batch, like, we gotta do a higher price. Like, you'll get feedback on any aspects of it that were confusing. It doesn't mean year one that you have to do a hundred percent of the client base. The goal is kind of just to learn and, like, start chipping away at what we've got. But, yeah, I would say start with the renewal folks. And a big part of this is being able to frame what we're doing differently as an opportunity for them. I think this is probably the biggest thing that we get wrong in our price increase letters is it is me, me, me, me, me, me, me. Like, like, describing all these reasons why I have to do this, rather than being like, my name's Hope Brown. I am super in demand, and I can only help so many people. And in order for me to deliver the level of service that I want to for those people, I can only help, like, twice as many or half as many people as I am right now. And this is how we're getting selective about how I will help those people. So, like, there's a framing of this that is exciting for the folks who are, like, it's been kind of hard to get ahold of you. Like, maybe I would love to have more access to you. Or if we frame it more through the lens of the opportunity that's now available for folks, then we're not just sending them this sob story of, like, so sorry, we gotta reel all this stuff back in.

Hi, I'm Christy. I'm a longtime listener. First time caller.

Okay.

How do we work around other leaders in a firm who want to set up tiers and are gung ho about it, but how do we.

I know they're recording.

How does one help, say, a founder or other leaders who are selling packages or are the person that someone might strive to go to a gold package to talk to stay out of the bronze and silver packages when they are not being sold at that level?

So how do you bring them around to that?

Right. They're excited to do it. They want to do it, but they also want to help everybody, no matter What? And so it's really hard to sell a gold package package when they're butting into bronze packages.

Are they not working too many hours already?

Oh, they are a total workaholic. But I can't control that.

It must not hurt bad enough yet,

you know, so how do I make it hurt worse?

Okay, so how do we stop them over serving the folks who don't have access to the thing they're not paying for? So you have, you put a higher level of importance on this than they do. That's what we have to somehow bring them around to is here's where this goes sideways. If we don't respect this boundary. To me, that still feels like change management is I am here and they are there. How do we close the gap? Because there's something to you and your experience as an accountant where you're like, this is impossible, like we can't do this and this is very important to you. It's just not to them. It's a tricky one, I would say more generally around change management. Oftentimes what's helpful for me is to kind of reverse engineer my context. How did I get here? You know, like people are gonna come out of here talking about three tier proposals and all of that and you'll run up to somebody who is not in this room and be like this, this, this, this. And they'll be like, yeah, okay, like maybe I get a little bit, but not really. As opposed to like you're walking to dinner with somebody who is here, you have much more of that shared context. That's probably the best advice I can give is what have you seen that just has you feeling that like if we don't respect these boundaries, it's going to be a complete mess and there's almost no point in even having boundaries. And how do I get them there? Like it is, It's. To me, it's one of those things where the more we are kind of working in the same direction and you are in some ways, but you're not in other ways. Because it's like, if you're gonna set these boundaries, what's the point of even having them if they don't respect them? That's one of those situations where I feel like sometimes you almost need the person that they will listen to, which isn't you. There's a lot of folks who like won't fully buy into something until they can see someone they respect who is fully committed to that vision. And it's not until they see that that they will themselves Buy into it. So is there a way to like get them access to like, who are the folks that are having these conversations and reaping the benefits of this change? How do I get them in that room? How do you get them plugged in with folks who are, you would say, doing it? Right. But then also how did you get there and how do I get them to the same level of conviction?

I do a 20 minute intro call, somebody just books online. Then if it's a fit, we do a discovery call. After the discovery call, then I work up a scope of work, send out a three tier proposal in ignition with a loom video. Walking through the three tiers, my question is, do you think that's a good way to go about it versus presenting a three tiered proposal in a live call? Because I've heard some other firms presenting it in a live call so they can like discuss objections, answer questions right then and there versus they watch the loom video. I get notified, they watch it and I never hear from them again.

Yep.

Or they accept it, which is the best case scenario. But. And it's ha. I've, I've had my best client, highest paying I've ever gotten, except through that way with watching the loom video. And then I've had like, like the worst low paying possible client ghost me.

Yeah. Yeah.

So I just.

Or they need to get on a two hour call and unpack the details for $200 a month. I don't want to be on the call the first time they see the proposal for the same reason that I don't deliver tax trends or financials that way. I think what you end up doing is you just watch them process. You put that thing up and they're just like, oh. And they have to like read it all and process it all and understand how to feel about it all. I don't need to be in the room when that happens. So I send it over to them and say, hey, give, give this a look through. Depending on the dollar amount, I will either say one of two things. I will either say, here's my calendar if you want to hop on a call and discuss it, or here's my calendar. Book a meeting here once you've had the chance to review this. There's some folks like at a certain dollar value where the meeting still needs to be mandatory, but I don't want to do it live. Like as they're seeing the proposal because they're just, they're processing so much there. So the only change I would make is Just depending on the dollar threshold, ensure that the expectation is either they can book a meeting if they want to, or they have to book a meeting after they've had a chance to review. My question is, with the three tier proposals, do you think there's value in placing a cap on your gold slots? Both from like a. If you're offering a premium or priority thing, you can only realistically prioritize so many people and also creating like that artificial sense of scarcity. Do you think that's something that is a good value add or do you think that's something that's going to drive people away? Hondo P. That, that is a super important point. That is one of the points that we didn't get to in that, in that guide. So here's what I would say is actually two things we got to drive both scarcity and urgency. So anytime you send a proposal, there has to be a deadline that goes out with it. Like, the proposal can't live out there forever, but on your premium packages, that deadline needs to be like even deadliner. So like on that silver package, what I would say under the name of the silver package is deadline for this is like, you know, a week out or less, something pretty tight so that in a few days time, if I haven't heard back, I can send them an email and be like, hey, just heads up. Want to make sure you didn't miss it. If you do want to opt into this, which I thought might be a good option for you, the deadline do that is in a few days because we got to hit the ground running on this. So that will genuinely cause more people to opt into it because it's not enough to put something in front of them where they're like, yeah, that makes sense. We have to give them a reason to make the decision today. Like, we want them to pull the trigger when they see it. So, so build some urgency into the silver option that way. But then on the gold tier, this is where I'm gonna push my scarcity. Because you can only deliver gold to so many people, right? And how often do we get underwater and over capacity and get behind and then we just apologize to clients who are like, yeah, sorry man, like we just were running behind, it's taking longer than we thought. So sorry. Like, there's so many examples of companies that undersell demand, like your Ferrari, your coach, your stuff like that. Like these people don't apologize for like underselling demand. And just to be clear, like, we're not Ferrari and coach, like, I've I've seen what you do. It's, we're not Ferrari and coach. But what if we flip this to the. Instead at the beginning of the conversation, say, I can only help this many people. Just so you know. Like, that's not a bad thing to say. Like, I'm scarce, I'm in demand. Let's put that up there. So on the gold tier, right under the title, what I would say is seven seats remaining, 45 seats remaining, whatever that looks like for you. Like, communicate that that'll actually cause a ton more people to pick gold because they just don't want to miss out on it, which is kind of dumb. But, like, it'll make a difference. So, yes, scarcity and urgency do make a really big difference. I was actually hosting a dinner or a lunch in San Diego earlier this year, and it was a solo guy that had built his own practice and had grown to, what was it, like 6 or 700 a year or something like that. He's like, all I changed in my proposals this year was I showed my availability. Like, I stressed these two things, basically urgency and scarcity. And he's like, we added like 300 and basically profit because they were the same options. We're just communicating it in a more clear way that, like, builds this urgency of, like, I don't want to miss out on that. And he's like, it's so dumb. But he's like, we're just shocked at how big of a difference it makes. So, yes, that's a great example of, like, even basic version of three tier proposals. Like, don't let kind of the advanced stuff scare you away. But really small changes like that, like those three words, seven seats left, like, stuff like that will truly make you more money. Thanks for calling that out. That is one of the things we've got in here. I've been really struggling with the question of how you define advisory work. And in my tiers for the bronze tier, I've got email, chat. You have up to one hour, you can ask me questions. In the silver tier, you get tax advisory. So you can call and you can talk to me and ask me questions, but I'm not gonna do any projects. And then in the gold tier, you can call and talk to me and I'm gonna do a bunch of work for you, but I'm really struggling with, like, what is advisory and how do you price that and how do you explain that to clients? If you can't understand it, your clients can't understand it. Like, I don't know, it's a very inside baseball accounting thing to even say, you know, the fact that we're like, I don't know, like our clients, like they don't care. Like they're just, they kind of focus on their own problems. The way I think of tax planning work specifically because what, what you're describing is it's kind of all inbound. It's like, well, when you've got something you want to work on, like these are the different ways that you can work with me. I try to flip that to be like, what's the more proactive version of that? And so it's helpful for me to think of it in terms of scope. What's the work we're going to do and access and be very explicit about those and even separate those on my proposal. So the best framing I've gotten to for scope of tax planning is in when we are doing the work. And my version of this was we would either do none of it and just do prep or we would do year end planning or we would have two touch points. A touch point in the summer after Q2 closes and a touch point at year end. Those were kind of the three different levels of scope that I would serve people at. But then the level of access that is, can you email me, can you call me, can you only talk to my team? That is how I would delineate the delivery. So to me, the level of access, how it's delivered is delivery and then how much planning I'm doing for them, either just prep or at year end or twice a year, that's how I think of scope. And I think that's important because the folks that we're serving, if they've, most of them have never had tax planning before, they don't know if they will get any benefit from tax planning. And if they're a very simple 1040 that only has a W2 or something like that, and there's really not that much we can do. They're not even itemizing. They don't. Honestly, it's hard for me to justify tax planning as opposed to other people that are paying hundreds of thousands of dollars in tax every year and they've got a business and there's a lot of things that we can do for them. That's where the value of our recommendation on the scope is super important. Like I can come to them and be like, I'm 90% sure you will more than get your money back by like us doing tax planning twice a year, where that's not the case with a super basic 1040. So I think of it more through the proactive lens rather than sitting back and letting them come to me and just gatekeep what questions are allowed to ask. I want to proactively say, hey, I'm your tax advisor. Based on your tax situation, it would financially benefit you for us to do either tax planning once a year, twice a year, or never. And then I let them opt into what delivery they want. Do they want to do live meetings? Do they want a 24 hour turnaround time? That's how I structure the three tiers. So it's kind of taking some of the same things and just sort of splitting them out on sort of different dimensions. I can tell you one thing that is tricky when you're getting into the business of selling service delivery. Like we're all very well versed in selling scope, selling the doing of the work, but that's honestly just kind of a race to the bottom of like working your fingernails down to the nubbins. Most of us, like we know how to set up scope in our practice management system. Like usually you've got a proposal that includes this level of scope and there's some sort of task template hopefully that then gets created in your practice management system. Right. And this is how the team knows what work to do. But how do we do the same thing for how they expect us to serve them? This is kind of a new thing that we're learning to sell. The whole first class being different than coach to me, honestly. Like the version one of this and start with as basic of a version of this as you can. The version one of this is either at the project level or the client level just having a field for like what level of service did they opt into? And like you could make this really, really basic initially. Like it can just be, I mean you can even call it bronze, silver, gold, internally, like call it whatever you want. But somehow your team has to know like what's the expected turnaround time? Who are they expecting to be able to work with? You know, if they text the owner but they don't have access to that service, like we have to somehow be tracking that in our practice management system. Right? Like what should that look like? And I think in many ways, like once we can sort of get our heads around what this looks like, it's actually much easier than how we track scope because we can put it in kind of three different packages. Like maybe you want bronze to be like they can only work with your team and there's a 72 hour expected response time. Maybe Silver is they can email with you, but they can call your team. Maybe Gold is they can call you. Like that's kind of the upside of not having a language for this yet is we get to make up what the answer is initially. And then somewhere in our practice management system we're tracking what level of service does this client get. And we will be like super OCD about this. Like in really digging into the details, the honest truth is clients oftentimes they will forget in a matter of weeks what they even have. And so like if this stresses us out, like we do have to make sure that we deliver on like what they've, you know, opted into. But the stress we feel about like the client really digging into the details here. Honestly, the next year you put the proposal up in front of them, they're going to be like, I'm going to be honest with you, I don't even remember what I had before. Like, I promise you they're not as focused on this as we are. The real opportunity is being able to put those three options in front of them and that person be like, well, I'm a first class buyer so I'm going to opt into this first class. The real opportunity is when they opt into that gold project, which by the way was four times as profitable. We've got a lot of time to figure out how to deliver that project like we do. Like even, I mean even if that thing takes twice as long to somehow now serve, like that's still a more profitable way to run the business.

My question's around paying team on production. So I've been paying my team on flat rate which when I did that I kind of took a look at how long it should be taking based on the client rate and figured out a percentage. Now I've gotten better at my pricing and now those team members, one in particular is really high rate wise, which I guess isn't terrible if I'm still protecting my profit with that percentage. But I guess I'm just curious your thoughts around flat rate versus hourly in this industry. Because my business coach says just put them hourly, but I don't think that's going to be received well, I know it, I know it won't.

Do you want them incentivized to land higher priced engagements?

Yes, I mean they're not really doing that part as far as, I mean I'm doing all the marketing and getting the engagement, but I want them to be incentivized to be, you know, efficient, which is why I started it in the first place.

I think we have to think bigger than just the doing of the work. To Geraldine's point, the inputs have nothing to do with what people will pay us for. Right. And like that's probably something that's easier for the business owner to see than the staff oftentimes who are just used to the 40 hour weekly model. The more I can align how you make money with how they make money, if they're sitting in this room and I'm saying like, hey, we can make this project twice as profitable, that's exciting for you. If they're in on the same upside, that's extremely exciting for them, right? Like they run out of here and they're like, I got to figure this out because I'm already planning like the family vacation, all that stuff. I think that's the beauty of aligning them with how you make money is a win, is a win for everybody. It's trading one type of game for a different type of game for sure. But to me, that's the value of like pulling them in as close to how you make money as possible. Like the, the hourly has its. I mean it's easy, but it's in the same way that billing clients hourly after the fact is easy. It's also not optimized in some ways, right? The efficiency ought to be a product of here's how much money I want to make. And to make that you're getting as many projects out the door as I think you ought to be getting out the door, right? So like the, there's kind of a self selection thereof. If they are not efficient, then they lose in your setup. And so then your setup attracts the most efficient people where they're like, I'm very efficient, I can crush in this model. It's that time of year, the time of year where your hosted tax software starts grinding to a just to a halt because everybody's trying to use their computers at the same time. This is because when you host your apps with most providers, like your tax software provider, the servers you're accessing, they're shared servers. Everybody and their mom are logging into those things, trying to get stuff done at the same time. The solution is today's sponsor, Verito Man, Verito is going to give you your own private server where all your tax stuff, even any hosting needs, QuickBooks, desktop, whatever you got, it's hosted on a server that only you're accessing. So it doesn't matter how many people are hammering that server. The only people Hammering it, are you? It's easier than it sounds to get started. That can actually transition you in just a weekend. And especially as we're heading into busy season, gang, this is the time to do it. Bardo. Vastly cheaper than the hosting you get from your tax software provider and faster. Like kind of a no brainer. Now Bardo can also do your whisp, the little security thing you gotta do. If you do tax work in the US they can also be your entire IT department. In fact, the cost of hosting your apps and them being your IT department is less than Thomson Reuters Virtual Office know a lot of people, they're very happy Barretto users. In fact, the average response time from Barretto Support if you come to them with an issue is now less than 60 seconds, 24 hours a day, seven days a week. Like I said, now's the time to do it. Before we get too far into busy season. To learn more about Verdo, check out the link down in the show notes. Can we talk about a very real problem with most offshore staffing solutions? I actually faced this one myself is the staffing groups that serve as sort of like a middleman, a middles person between you and your staff. Like you pay the middleman and then they pay part of that to the staff person. Did you know in most setups there's actually no way to get that staff person out of that agreement? If you're like, I'm actually tired of paying half the monthly cost to the middleman. Like half the money I'm paying is going to this company, not going to the person. Can I just work with that person directly? Most of those contracts, there's actually no way to get that person out of that employment agreement. That is why this episode sponsor Team up exists. They're an offshore staffing solution where you just, you work directly with that person. Team up, they're basically just going to serve as the recruiter and then after that there's no ongoing fees. Half of the money's not going to somebody else. You're just working directly with a talented human being. In the Philippines, the progression honestly for most accounting firms is they'll hire, you know, three to five folks offshore, have good luck and they're like, okay, what does it look like to go to 10 or 20? And they're like, I don't want half the money I'm paying to go to this other group anymore. I just want to pay these people directly. That's what team up will help you do. Finding somebody great for a one time flat recruiting Fee actually founded by a former bookkeeping owner too, if that's something you want to explore. Learn more about Team up down in the link in the show Notes.

I would like to hear your thoughts about firm structure in terms of a team.

So I feel like a lot of

the accounting firms that I've talked to are going through this, like, bottleneck expansion. I hired people.

I didn't hire the right person.

Now I need a manager. Psych. I need a bookkeeper. And would be curious about what your thoughts are as you start from even solopreneur or a couple of people and you're expanding. How do you know which level you're supposed to be hiring for next?

I'm a pod guy, and so I think of my very first hires as sort of forming the first pod around me. And my pods generally would get to the size of six or so, so there's a little bit of redundancy there. I usually want the client to know two people in my team so that if one person goes somewhere else, they still know 50% of the relationship management. Inside of that pod. I had juniors that were supporting seniors, like everybody had someone they could delegate things to. This also made it easier if somebody left to flex, work a little bit. And then when we start a new pod, like, we've got a larger pool of folks to put pull from. So my approach was like, I am the first pod lead and I hire around that pod lead. And there's folks kind of at the whole skill spectrum, both onshore and offshore within that pod. And then when it comes time to spin up the next pod, some of those folks transition into supporting both of the pods because I'm not going to hire another six people. So we transition to like having a second pod. And like, oftentimes it's the junior folks that are running support on both pods for more of the senior folks. And we kind of did a logical progression from that. In my case, when we were at 30 or so folks, or more than like three or four pods, that's the first time that we then started building sort of what we called functional groups. Pods became about relationship management. Functional groups came about delivering a specific service, like they're kind of the back office cranking on bookkeeping or payroll or bill pay or something like that. And so those are standalone teams that were just kind of the production team. And then the pods took on a little bit more of a client relationship role. That was how I did mine. We've got some writing that we've done on, like, what are all the ingredients that you need within a pod to kind of make it its own healthy, self sustaining thing. It's definitely not the only way to do it. And a lot of times people are like, what's the org chart thing that'll scale me to a $10 million firm? And it's like, brother, that's not the goal. Like there is no right answer that'll Survive your next 10 hires? I think so. A lot of it is just like, what is makes sense until this milestone and then beyond that, what makes sense to the next milestone? That would be my answer, but I would also bounce it off of like in my head I'm like, how many people do I want to get to? 15, 20, whatever that is. And my head, the more I have access to folks that are at that stage and I can ask them, hey, can I see your org chart and tell me what works about it and what doesn't work about it right now that's a tremendous resource if folks are willing to share that.

What would you say is the best

way to get that first client? Would that be website, social media? What would that be? Referral events? Referral from somebody that's getting rid of clients is the best answer. So there's a great, that's a great promotional question. Honestly, that that is my best answer because the first one is the hardest one. Every single accounting firm that's like reached capacity, they have the same problem of I need somewhere for this stuff to go. But without any context, just doing cold outreach to those firms is extremely hard because we get so much cold outreach and you don't want no one person from another. That's what makes a room like this so magic. So that, that is the best answer I think is if other firms can send you that work. Otherwise, look for the areas where the folks that you want to work with are already collecting. Like a consultant, for example. Like if you're a tax pro, what's something of value that you can offer to that consultant? Like host a one hour tax Q and A or walk them through how the new bill impacts dog groomers or whoever it is that they work with. If you're a bookkeeping pro, like walk them through kind of what the right sort of tech stack for a business like that looks like right now and how you build sort of your internal finance team team, like think, is there something of value I can offer to the consultant that they can pass on to their clients and like I can present this to them. That's how I get the consultant to say yes. Because they're getting a lot of cold outreach also. So if not from other firms, and the right answer is like, probably do both, but from other firms, but then also finding who are the connectors that already have these relationships and consider how do I give them something of value? So you talk a lot about software and you know, that was kind of what got me to follow you is, you know, practice management and everything like that and putting out your app recommendations and stuff like that. But it feels like right now there's a lot of like app fatigue. And how do you narrow down the focus of like what's important and like, other than the practice management? Like, how do you gauge when you should pick that next software up and that problem, you know, that problem tier that answers that next. In practice, it's a more human thing than the spreadsheet. Makes it look like it's not as simple as pulling this and pulling this and pulling this. Like there's real work that goes into that. Even a practice management system, like they're so big and so complex now. There's so many different ways you can use it and some folks have it dialed in on other folks, we don't. Right. So I would say it is more what are my humans feeling right now? And before I plug another thing in alongside my pm, have we actually gotten everything we can out of the pm or are we kind of just throwing a bunch of stuff at it and seeing what sticks? So I feel like the people on your team oftentimes are the filter of that. Like what's, what's the excitement level for that next thing in terms of order of priorities, you've seen my food pyramid sort of thing. Like that's kind of the idea is you work up from there. So you got your core tools, tax offer, your ledger, then your pm, then really closely behind that, and in some cases even for solo firms, equal to that is month end close automation and your tax workflow solution. Because if you do a high volume of 1040s, that's such a time savings. Anything beyond that for the most part is kind of like frosting on the cake. Like those are the biggest core things to the degree that you can get your team on board and plugged into that. And there's even situations where I flip those. If you're in, say a legacy firm with folks that are like, I don't wanna change our whole freaking practice management system, that's a huge undertaking. Sometimes the easier path there's is you go out and you're like, okay, we do a bunch of tax. An easier win is pulling in a tax workflow tool because it's not that hard to set up and people can see like, oh, dang, this is actually pretty cool. Then you get a little more buy in for maybe the bigger lift that you do next. Okay, kind of feeding on that just real quick. Like I've heard of a couple of firm owners talk about, they only work with clients that feed into their software or whatever they're using. How. What is your view on that? If we come back to the way that I want to make money, which is on service delivery and being higher touch and doing more, I would say going a little more white glove, I think is an easier way to make money. Usually the rationale for I will only work with you if you use this is to get more things out the door. That's a hard way to make money right now. And it's what I will ultimately eat into first is the volume stuff. So depends on what type of firm you're excited to run. Myself, I think there's more money to be made in the service delivery and getting a little more bespoke. It's a trade off. Like there's actually very real security risks with working with traditional banks and having your clients send you the two FA code, where the text with the two FA codes literally says never share this with anybody. So you got to figure out where to draw the line for yourself. But if you're leaning towards being the volume shop, that's a hard business to set up right now.

So in my firm, I'm the problem with 100% giving away free free work, where we've got our three tiered proposals, the clients accepted the correct proposal, and I automatically, within the agreement, give them something more than they've signed on for. How do you stop that? And how do you then say, I have this idea, something better than what we're doing for you right now before

renewal season, you have this idea outside of renewal season, you're saying, yeah, always

like, I'm always full of ideas and it's always like, we can do this better for you and let me just

do it for you.

And it'll just take six hours of my time.

The ugly truth here. And I get like, I get a version of this question in every city, the human paywall and how to do this tactfully because nobody wants to be like, oh, you've gotten to the end of the free or in scope version of this conversation. You now have to put in more coins to continue the conversation. Conversation like we all know that sucks, right? To me, the real answer is like, we just have to be more comfortable discussing scope and like part of that idea that you're floating to somebody. And I've like, I've been down this road. Like this is, you know, me having to have these uncomfortable conversations with clients. It is. I've got this killer idea. Like, here's what I think the opportunity is. This is definitely a change in scope and a change in the terms of how we support you, but this feels, feels like a no brainer. Let's talk about it. So it kind of comes back to what we were talking about earlier where it's like, as long as we're communicating in a way, when it's like, what's in it for them? What's the opportunity for them? Then by and large, like folks aren't going to have any problem with that. In fact, scope expanding to me is a signal of a really healthy relationship. Like that's like a good employee where they're crushing it. And so you just keep giving them more and more stuff, like a healthy engagement, like it ought to grow over time. So there's kind of two things there. The. I've got an idea outside of a renewal, like for me that's just like kind of developing the language of being able to say that confidently and concisely. Honestly, ChatGPT is really good here. Like chucking a letter into Chat GPT. Let's steal another Geraldine idea because she's not here. You know, a price increase letter. She says, put that into ChatGPT and make it sound like it's great news for them. Like it's so good at that. So like being able to bounce this off of ChatGPT and say, like, how do I make it clear this is a change in scope, but it's an opportunity I really want to talk about. Like it's oftentimes better than us at like weaving that together in a tactful way. So that was kind of one thing, a scope change outside of a renewal. The other was, how do I stop myself from just giving stuff away? Do your team members ever do this?

No.

Interesting.

It affects my team, of course.

Oh, for sure it affects your team.

And what we were just saying to each other is like, we, we both have teams with people at the top and then we're missing like a middle layer. So of course it's going to affect those people at the bottom.

Yeah. Is it because they're asking for something more or more because you're proposing something more?

I'm Proposing something more.

Okay, yeah. So it is your fault. So, yeah, I, like, there's a loving, intact. I don't know about y'.

All.

Like, I would. I kind of get these specific talk tracks down that I would always do where, like, a client would, like, complain about a tax fee or, like, why is it more on the other guy? And I'm like, here's the deal. Like, in your case, when you're paying X dollars in taxes per year, there's a level of effort that we try to optimize for where it is worth us putting in extra effort to, like, get you these taxes, tax savings back. And so we're trying to, like, balance the effort we put into it, too. Here's the complexity of your situation and the opportunity. And, like, I kind of had these talk tracks where the client would ask this question 100 different times, and I would kind of get into this thing that I would always repeat. And I think you just have to find that for yourself right now. And I think the version of that that maybe I had had I got into this situation is, like, make it very clear that I'm excited. And I'm like, okay, this is actually, like, there's an opportunity here where I think we can help you more. To be super clear, like, this is a cha. This would be a change to the terms of, like, how we support you and price and all of that. But, like, here's the opportunity. And so I think it's probably just a matter of, like. And this could, like, role playing is amazing here, and it's an awkward thing to do, but, like, maybe role playing this with your team a little bit would help. I think this is a case where just having that talk track, the thing you're confident saying because it comes up every other week, and being able to make that super explicitly clear to the client that this is a change in terms. And then we would have to send you another proposal. It's probably just building a comfort level with that thing that you can pull out whenever you need it, gang. That is all. Thank you all so much for coming.