Tips to Grow Your Small Business | Incite Tax

90% of the economy is small business. So ultimately, the future of our economy is in your hands. That's why I want you to be successful, whatever your desires. If you want to manage lots of people or have a lifestyle type of business, the mistakes I'm going to share with you, they should help you out. Let's go over some of the marketing mistakes and the solutions that we came up with. These marketing mistakes helped one of our accountants grow their book of business by $224,000 in 12 months. So I joined BNI, Business Networking International, and some other networking groups. I was spending like 20 hours a week week just shaking hands, talking to other business owners, hoping that they would at least refer people to me. Super incredibly inefficient. I'm not saying networking groups don't have value, but the ones that I joined that were very low cost or free, guess what, put me in connection with other business owners and people who also liked low cost and free items. And other than that, I didn't really do anything else. I did end up meeting business owners, and anyone that had interest I would offer to do a free seminar, whether that's like a lunch and learn or a dinner thing. They were willing to get people together. I was willing to talk to them about taxes, and I'm talking basic stuff. Lunch and learns and small events, those can be really good in bringing in leads. It's something that you should consider. One of the most efficient ways that you can find some of these groups to speak to is to email your current client list. Let them know you're looking for a few opportunities to teach a group of people with that experience. Experience, my philosophy of serve first and teach first really ended up becoming my marketing philosophy because I really hate the hard sell. No one likes that. Another thing with marketing that I needed to do was build this digital real estate of topics that people wanted to learn. And there's ways you could do that. Google has a lot of keyword searches. You could figure out what things are being looked up, and then you create content. If someone's typing in a very common phrase that Google says people type in this phrase a lot, and you have a content piece that answers that exact question or is directly related to that, or even has the exact phrase, you start showing up in Google searches. Building digital real estate is going to allow a prospect to start building trust with you. It builds their trust that you actually know what you're talking about. And once they find that your information is valuable, they will keep coming back to you for more information. So how do you do this? Consistent blog posts, videos, guest articles. For other people, reports, anything that educates works just fine. But the secret to this is being consistent. You can't write a blog post and then 4 months later write another blog post, or you create your new website and you have 5 posts in a row, looks great, and then dead silent. The secret is consistency. You're looking at probably 5 to 10 hours a week that you should be spending on this if you're serious about growing your business. And the last thing about marketing that I'm going to share— marketing and sales Prospecting is like dating. Don't try to get lucky before you even go on the first date. We get the prospect's name and then we automatically want to sell them on our highest ticket price item. Look, we got to build up the relationship just like dating works. The goal is to get the prospect to the next most logical step. They give you their name. Are they willing to open up about things that are troubling them about accounting or taxes? Get them talking. Now that they're talking, are they open to recommendations you may have or suggestions or things They could think about, so you move them along this path. The next thing I want to talk about were the mistakes I have with my process flow. In the beginning, I was super inefficient at bringing in new clients, as I mentioned, spending 20 hours a week networking to get a few of these gigs, which meant I also ended up being a little scattered as I tried to do the actual work and stay on top of the client projects and where it was at. And once I got really good at bringing in leads, now I have too many new clients. Which is actually a thing. And not only was I struggling to manage all my tax return projects, now I'm struggling on bringing on new clients because bringing on new clients of itself is a project. Does the client have a crystal clear understanding of how our services really work? And do they know what they're really paying for? It becomes very inefficient. So I recommend finding a software that makes this easy. And there's lots out there. I'm not a sponsor for some sort of software, but regardless of what software you use, Do we make mistakes? Yeah. And do clients leave us because of those mistakes? Yes. Average retention rate in an accounting firm is 78 to 85%. Our firm has 95% retention, and Project Flow is one of the reasons why we have such great retention rate. True growth happens more from retention than it does getting new clients. Retention increases when you have systems that wow the client. And I can tell you what I just laid out, the client feels involved in the whole process. Rarely do we have a client wondering where their tax return is or what the status is. The next part I wanted to talk about was managing cash flow. I spent that first year on my own doing what I call being a price-titute. Someone would ask me, hey, what did you charge for your services? And I would say, what do you want to pay? Basically, whatever somebody was willing to give me, I was going to do the work at that price. That is not the best formula for setting up prices that allow you to build in flexibility in your life and have this work-life balance. Not to mention those types of clients that are just looking for the lowest price. Guess what type of people they know and are referring to you? Other people who are like them, who also are just looking for the lowest price. And again, what you do is so much more valuable than becoming a commodity. And I get there's a lot of options out there. You're a real person and you add so much more value than a software can. Don't ever sell yourself short. I also learned While working at a Big 4 firm, the danger of billable hours. As an employee, I was promoted based on how many billable hours I had. Also, as an employee, I didn't have any control over my workflow. In fact, if you think about the traditional model, very few people in the organization actually control workflow. It's just very inefficient. And the problem is, is your clients are the ones who actually eat that cost. So these clients of this Big 4 firm are eating the inefficiency. Of their promotion model, the vain people that are accruing the expense—they don't control the workflow. Maybe you are just screwed because the staff account working on your project had nothing else to work on, and so he took a sweet time on your stuff. Come to find out, your clients hate being invoiced by the billable model too. It makes them feel nickel and dimed. Doesn't leave them feeling like you care about them as a person. We think you should charge based on the value you create. We have enough clients. And enough leads coming in that we don't have to choose to take on someone who doesn't value what we do, who's just shopping for price. Another thing about cash flow: when I was only doing $200,000 in a year in revenue, I had almost $100,000 in accounts receivable. So now I've given myself a third full-time job of having to track down payment information from clients. Our process that we have now in the engagement letter—they have to give us their payment information. Clients in their engagement letter are authorizing us to charge them for the fees they already agreed to when they signed the 8879 to e-file the return. Our accounts receivable, it's much smaller and it's definitely less of a problem right now. The third thing about managing cash flow is profits first. It's based on a thing called Parkinson's Law. So Parkinson's Law says that the demand for something expands to match its supply. How does this relate to cash flow? With one business banking account, what we have is a giant pile of supply. Now, our demand on that cash, the demand of expenses, is going to continue to expand as long as there is cash available to spend. Parkinson's Law. It's human behavior. We're not going to be able to change that element of psychology. So instead, what we say with Profit First is let's put some boundaries around Parkinson's Law. The full system— I mean, you can read the book. It's really good. It's definitely changed my life in so many ways. But the book recommends having a few different accounts in order to make these boundaries around Parkinson's Law work really well. What I'm suggesting, at a minimum, in order to avoid Parkinson's Law on some of the big things, if you create a couple other bank accounts and have specific purposes for them, one of them to be set aside your income tax money, set it aside in a separate account, and then setting up another account so that you're setting aside an amount of money to pay yourself for the work that you're doing in the business. This way we avoid revenue increasing, yet my take-home pay doesn't increase. I'm increasing the hours of work and stress I'm taking on, but my take-home pay isn't increasing. Set aside a percentage of your income into this account. We call it owner's pay to make sure that as income increases, so does your owner's pay amount. I hope you've learned something. I'm telling you what I shared with you has drastically transformed the trajectory Where my firm was as a solo person, I hope you take action. I know it'll serve you. I know you're going to get benefit out of it. Thank you for being here, and I look forward to hearing from you in the future.