If I started again... First 3 things

Hi there, it's Mark Wickersham here. And I thought I'd do a video based on something someone asked me in my Facebook group. Value Pricing with Mark Wickersham. They asked, what should I do now? I'm starting my new accounting firm. And it got me thinking that I started my accounting firm way back now in May 1996. Started from scratch, built up as a sole practitioner. And I made so many crazy mistakes in the first few years that if I was to ever go back, I wish I could have done things different. So in this video I want to share with you the three things at the top of my list I would do different if I was going to start all over again. So here they are, the first one, number one, is I would hire people differently. I grew my accounting business fast. I went from zero clients to 200 in less than three years. By year three, year four, I had a team of 13 people. I was growing crazy fast, but I wasn't growing profitably. It took me three or four years to figure out a better way. And one of the big mistakes I made was hiring people. You see, I didn't have a huge amount of money. And so what I did is I cut every possible corner I could. I tended to hire college leavers, school leavers, rather than qualified accountants. I would tend to avoid the fees of recruitment agencies. And instead of if I met somebody looking for a job, whether they're right or not, I would take them on because I wouldn't have to pay an agent's fees for that. As a result of that, I made so many hiring mistakes. The problem with employing people who aren't the best is the work's not as good or you have to micromanage them. And I found I spent so much of my time in those early years micromanaging people, micromanaging junior trainees. That stopped me doing what I was good at. And if I was to start again, I would aim to grow more cautiously. I would spend more money on the right people and get the very, very best people who are capable of doing the work, dealing with the clients, and that I don't have to manage. Yes, they might cost more, but in the long run, that's actually going to save you a huge amount of money. Now, of course, the challenge there is, and this is why I made the mistake, is I didn't have the money in the first place. And that's where number two would kick in. You see, the other thing was I didn't have a pricing strategy. I didn't understand pricing back in 1996, I was way too cheap. I went in cheap because I wanted to grow my business. I wanted to grow it as big and as fast as I possibly could. So I did things like this. I would go and see a potential new client. I would add massive value in the meeting because I came from a tax background. I would spot tax planning opportunities in the meeting. I'd say to the client something like, so I can spot some tax planning ideas. Could I have a look at your last set of accounts? They'd give me the accounts, I'd go through them, look at the balance sheet, the profit and loss, see if there's some tax planning tips. There were always two or three tips I could give, and they would be impressed. But actually, what I was really doing was I was going to the back page and I was going through the detailed profit and loss account, looking for that one line that said all audit and accountancy fees. And I would make a mental note of the number of what the previous accountant was charging. And so when they then said to me in the meeting, this sounds great, Mark. We've never had this advice before. This is awesome. What's it going to cost? I would have this cold sweat thinking, I don't know. So I then say, I'll go and think about it and I'll send you a proposal.

And when I did my proposals, magically, my price was typically 5, 10% less than the last accountant. I thought I was clever because I was growing a practice fast. I went from zero to 200 clients in under three years. But the reality was, I was being so stupid. I was being stupid to base my price based on what the other accountant was charging. I should have charged more. They were looking to move to me because I was better. There was something about their existing relationship they weren't happy with. People know in life if they want something better, they pay a higher price. Why would I charge the same price or less? It was crazy, but I was young and naive. So the second thing I would do is I would think long and hard about my pricing strategy and make sure that I wasn't cheap. Because when you have the right pricing strategy, you'll make more money and then you can afford to hire the better people. Number three, the third big mistake was I learned years later that the importance of having an ideal client profile. I'd never stop to think about who is the right client and who's the wrong client. I took on anybody. Anybody that wanted an accountant, I would take them on. And the reality was, most of them were terrible clients. They were looking for someone cheap. They didn't want to pay. Very often they didn't pay. And so I end up wasting a huge amount of time energy resource dealing with the wrong clients. If I was to start all over again, I'd be thinking about the right pricing strategy. I'd be thinking very carefully about the right client. I would look to take on only the right clients. I perhaps wouldn't grow as fast. But as I found out years later, you, you can make much more profit with fewer people, with fewer clients when you've got the right people, the right clients and you're charging the right price. If you want some more help, I'll put some links below this video in the Resources and if you found this valuable, please do click the like button. Please feel free to share this video and also please subscribe to the channel. Bye for now.