Latest / The Accounting Podcast / The Coaches 🎙 Live at QuickBooks Connect
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- This episode of The Cloud Accounting Podcast is sponsored by Intuit QuickBooks. Accounting professionals and bookkeepers have long been at the forefront of using cutting-edge technologies to take the profession to the next level and to ensure they're delivering the best possible service to their clients. Whether you want to grow your firm or sharpen your skills, Intuit QuickBooks provides you with the AI-driven products, services, and the resources that you need to help all sides of your career take shape. To learn more about how QuickBooks Online, QuickBooks Online Accountant, QuickBooks Live Bookkeeping, and the ProAdvisor program can help you grow your practice and scale your impact, head over to CloudAccountingPodcast.promo/quickbooks. That is Cloud Accounting Podcast dot promo forward slash Q-U-I-C-K-B-O-O-K-S. QuickBooks - Backing you. Heather Townsend: Well, we've had a look at our own pricing, and we're not charging enough, and we're not giving the service, and we've gotta take our own medicine. Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Michael Palmer: Michael Palmer, the CEO of Pure Bookkeeping [00:01:00] and the host of The Successful Bookkeeper. Michelle Weinstein: I'm Michelle Weinstein, the host of the Abundant Accountant Podcast. Heather Townsend: I'm Heather Townsend, the founder of the Accountants Millionaires' Club. David Leary: Whoooooo! Blake Oliver: Yeah! David Leary: We're all here. Welcome, welcome, welcome. We are here. It's our first podcast recording today at QuickBooks Connect 2019. I brought all of you on because I'd go through all the speakers and try to figure out what would make a good panel or what would make a good episode? All of you are coaches. Now, there's a lot of coaches here at QuickBooks Connect, but a lot of them are small business coaches. What's special about all of you, you specialize [00:01:30] in coaching accountants and bookkeepers. Michelle Weinstein: Oh, yes. David Leary: Some of you focus more on the marketing side, some of it's more on the process side ... What's the number-one thing, right now, accountants or bookkeepers are asking for help with? Michael Palmer: Well, it's number one in the talk tomorrow, and it is mastering the art of pricing. Blake Oliver: Pricing. Michael Palmer: It is an art. It's an art. It's a long journey, as well. Long journey. David Leary: Is it just creating the price, or is it having that pricing conversation? I think that's something you always talk about, right, Michelle? Michelle Weinstein: I talk about the conversation, but he's [00:02:00] right on, because I just had a conversation with someone else. I just told them to triple whatever they thought it was. Michael Palmer: That is ... I agree with you. I agree absolutely with you. Michelle Weinstein: Yay! Okay, good. I'm glad I- Michael Palmer: That's part of the journey. That's part of mastering it - taking those steps. Michelle Weinstein: Right. Blake Oliver: A show of hands - who is a value-pricer here? Are you guys all into value pricing or is it fixed pricing? Heather Townsend: I think I've gotta jump in here. Blake Oliver: Yeah. Heather Townsend: A lot of what we talk about value pricing is not value pricing. Actually, we're talking about ... When we say value pricing, we're more talking about fixed-fee pricing [00:02:30] based around a cost-plus-margin model. When you're selling tax, actually, and you're doing that on a contingency fee, success fee, that is true value pricing. If you're doing access to funding, and you're taking a percentage of the funding, that is true value pricing. What we're mostly talking about, and a lot of the pricing gurus have gone and put this out, that you're value pricing. Actually, no, you're just putting up your margins. The problem is, and I agree with you, the real problem here is we've got a marketplace that is moving from pay by time, charting by [00:03:00] time, and now moving to fixed fees. Now, the UK is probably five years ahead of the U.S., so I can give you all the kind of where do people go wrong, where do they go wrong, but it's still an issue in the UK. Pricing is still an issue. You have a population of people that typically have underpriced because they needed the work. They didn't have the confidence. They've now got legacy clients - low fee, low recovery - and they're like, "I cannot grow. I cannot do what I need to do because my price is wrong," and it's such a mental game that they have [00:03:30] to overcome. Michelle Weinstein: Yeah. I just literally had this conversation with someone. He has 125 clients paying him $275 a month. I said "Great. They're all gonna pay you $899. That means you can get rid of 84 of them. If they don't come back, you've got only 40 clients where it is high margin, and now you have time to go and focus on the real work that you wanna do. Blake Oliver: Yeah. Michelle Weinstein: Because you just don't have ... I think a lot of accountants that I come across, they wanna double their revenue, but they don't wanna increase and [00:04:00] improve their mindset. Blake Oliver: I would say that's the number-one question I get when people ... I had a bookkeeping practice, and people asked, "Well, how do I charge for bookkeeping services?" When they're getting started or they're adding it to their firm. How do you answer that question? David Leary: It's on the Facebook groups every day, you see some posts, like, "How much should I charge for my bookkeeping practice?" Michael Palmer: Of all the people that I've interviewed and actually seen get it right, it is a journey that begins with, number one, valuing [00:04:30] who you are [crosstalk] because it's like you've mentioned, right? It's about their own self-worth. When you own a small business, it's you, so you're pricing yourself in the beginning. The next step is, then, education. It's like there's so much education out there, but you have to educate yourself. What is pricing? Like, Heather, you were talking about, people misunderstanding what value pricing is. Educate yourself about all the different options that are out there for pricing. That gives you knowledge; knowledge is power. Then, [00:05:00] it moves into where you can start to take action. Where I've really seen people win is doing those steps - value yourself, educate yourself, value what you do, and then get help. Get mentoring because you've gotta go through some hurdles; you've gotta jump across the crevasse, and you need someone to go, "Hey, you better get jumpin'!" Michelle Weinstein: Well, you've gotta invest in yourself first before you can have someone else invest in you at a really high level. David Leary: That's right, yeah. Michelle Weinstein: I had a brain date, and she [00:05:30] wanted to double her revenue, but it's been going the same for the last 15 years. I said, "Do you typically go and look for a deal and a discount everywhere you go?" Because that's her complaint. She's like, "Yeah." I said, "Well, until you start buying first-class seats and finding the most expensive things, then we're not gonna be able to shift the way you think, and then you're not gonna attract the right people." It's the law- it's an actual universal law. Blake Oliver: What is a brain date? Heather Townsend: I've been doing loads of those. This is a QuickBooks thing where lots of experts have put themselves up, and you can book time. I've [00:06:00] just spent five hours, mostly talking about pricing, actually, around this. Interestingly, we were finding, from our members, their biggest issue was pricing. We've gone deep into neuroscience. We've gone deep into pricing; behavioral economics. We've looked at the most up-to-date IP. Our book, "Pricing with Confidence," we quietly put on Amazon last week, and we've literally taken ... It starts with your mind. It's all about overcoming fear, everything. Your brain is trying to keep you [00:06:30] where you are to avoid having the most difficult conversations because, after all, if you put up your price, you're gonna lose the whole of your firm, aren't you? This is the sort of fear that we put in our minds. Actually, when it comes to pricing, you have to win the inner game in your mind first, and only then do you need to go to your growth plans, and your profit margins, and all of this sort of stuff, and your sales process, so that you can actually demonstrate the value as you go through the process. David Leary: I'm all set, right? I'm mentally there. I've trained myself. I've been working out. I'm [00:07:00] ready to raise my prices. How do I go have that conversation with the client I've been charging $250 to, a month? Like, "Hey, you're gonna pay me $899 now." How does that conversation even start? Blake Oliver: Just to tag on to what you said, David, that was always my biggest challenge when I was in practice. It wasn't necessarily the new clients coming in the door because I could change my pricing, and I'm having a new conversation, but it was the ones that I'd had forever. I felt this, like, just fear of having that conversation with them. Sometimes, it would go on for so long that to really bring them up to market rate, I'd have to like double the price, [00:07:30] triple the price. Heather Townsend: I think that there's a couple of things here. The first thing is to understand what you should be charging them. Then, you need to put yourself in their shoes. If someone turned around to you and said, "Blake, look, what I've been doing for you, I'm gonna charge you three times as much," You'd go, "Uh ...?" This is about demonstrating your value, justification for it, and a classic line ... Anybody that's listening, write this one down. It's basically along the lines of, "You know how we always tell you to value what you're worth? Well, we've had a look at our own pricing. We're not [00:08:00] charging enough, and we're not giving the service, and we've got to take our own medicine." Most clients don't actually complain with something of those lines, but it's if you're delivering a great client service, you shouldn't be afraid of this conversation. It's all about the scale of it. One of the things is there's a lot of brain-based stuff about biases that goes on, and it's all about the contrast. It's about how can you contrast the increase? Is it just the equivalent of a cup of Starbucks each day? That doesn't sound a lot, [00:08:30] does it? When you actually look at that, a cup of Starbucks, potentially the coffee, and if you're in the U.S. because it's almost double what we are in the UK, that's five times 30. That's $150 a month, but it's just an extra cup of Starbucks each day. This is about contrasting it with the value that you're giving them. "How much is that peace of mind worth? How much did you reduce your tax bill? How much have you actually been calling us because you've got these queries around your books? This is why we have to raise it so we can carry on giving you that service." David Leary: If I'm hearing, Michelle, earlier about this, you [00:09:00] can't give your clients peace of mind, because if you're taking on too many clients at a cheap price, if you don't charge enough, you'll never have the free time to actually give your clients true value. Michelle Weinstein: Well, and that's what was happening with the women who I met with at our brain date. It was that exact problem. She's at capacity. In addition to that, I've had a couple clients where I said, "Why don't you take an inventory as to really how much time you've invested in this client?" Especially the long-term ones, Blake, because those are the ones that are actually making you lose money. [00:09:30] Do an inventory on that, and I bet you, if you go look at your few clients that have been the legacy clients, you're actually losing money on them because you answer the most emails; you talk to them the most; they pay you the least. Then you can go back to them and say, "You know what? I'm not a nonprofit," and do what you just said and say, "Look, I help you make a lot of money and, unfortunately, this is now at a loss on my books. I can no longer go at a loss." That's what I've seen. A lot of the [00:10:00] people I've worked with are running a lot of their older clients at a loss. Find someone to buy that piece of business so you can focus. Triple your rates - that's my other go-to. I think, like you were saying, it's all about the mindset work and really understanding your value. A lot of accounting professionals I've worked with, they went and got extra education; they've gotten a masters in tax, and they're not applying that knowledge to their pricing. Why [00:10:30] does a brain surgeon charge a lot of money when ... I love my accountants I work with. They have CPAs, MBAs, masters in tax; they're doctorates, PhDs ... I'm like, "But you're charging what a personal trainer charges," you know? Nothing against a personal trainer - I used to be one - but the brain surgeon, you're not gonna leave there without paying at least a million. Michael Palmer: Full stop, your business needs to do this, otherwise [00:11:00] your business will cease to exist. Michelle Weinstein: Correct. Michael Palmer: Think about it, if you're not doing it, your competitor will because they're the ones that are gonna deliver the value that your client needs and have the capacity ... Because what we're talking about here is- when we're talking about giving value, it's about capacity. One of the ways to get capacity is to remove clients and, sometimes, losing clients is a really great thing because if you're removing those clients that don't see you as valuable, but you're getting new clients that [00:11:30] do see you as valuable and willing to pay you, well, that's good for business. Coming back, David, to your question - how do you do it? - you just have to do it- Michelle Weinstein: You just do it. Michael Palmer: -and have a conversation. I think it's a conversation where you show value first, like Heather ... Really great, right? Show value; help them see how valuable you are; then have that conversation. Michelle Weinstein: Put yourself in their shoes, like Heather was saying, too, is really important because you have to ... I talk about how Heather and I are sitting next to each other ... I always put in my mind - [00:12:00] how am I sitting next to them, and how would I want to be treated in this situation? Because the girl that does my social media, she increased the prices, but there was justification. I don't have to tell her what's in my head. She knows me very well now. Heather Townsend: I think a lot of this comes down to time. The first thing we do in our model to help our clients grow their firm is not a growth plan; it's how are you gonna find the time for head space? We have to remember that most people talking about pricing are at capacity and, actually, it's not about going, "What my [00:12:30] prices should be?" It's about, "How do I find three hours extra each week for the next months in order to have the time to really think about this stuff?" Because everybody listening to us here is a busy professional who are awesome at what they do and, actually, how do you get that time? Well, if you're in the UK, you could sell that block of unprofitable fees for one times multiplier. If you wanted to get paid in two blocks, to pay two, you get one times multiplier. You've got, say £50,000, so about $60,000 ... You [00:13:00] could literally go to a broker and say, "I want to sell these." Within six months, you'd have £30,000 in your pocket. A year later, you'd hopefully have the rest of £30,000, and you would free up the capacity. Actually, that £30,000 will pay for somebody - maybe a part-time employee - to come in to take stuff off you, so you can then put the pricing in and sort this out. Because we forget, if you've got a hundred clients, you potentially got a hundred conversations. Blake Oliver: That's the problem. No, I just want to call out something you said. I apologize for interrupting, but when we think of our [00:13:30] capacity in terms of 2,000 hours a year, we tend to fill it all the way up, and we don't leave any room for improvement. Michelle Weinstein: Or health. Blake Oliver: Or health, or sales and marketing [crosstalk] Heather Townsend: -that's a big thing for us, yeah. Blake Oliver: Tell me what you think about this. I like to think of capacity in terms, not of hours, but in terms of relationships. How many clients at different service levels could I actually talk to enough to make them feel cared for? The work that we do these days is [00:14:00] becoming so automated that that's not what takes up my time. It's the emails, the phone calls, the meetings, and just being able to stay on top of relationships. I think of it like a classroom, right? A teacher, at a certain point, the classroom gets too big, cannot possibly know all the students, and maybe we should think about capacity that way ... Heather Townsend: Yeah. I think the problem is, is that - in particular, when you're growing - you've got too busy personally and you've got to make sure that you're less chargeable, but [00:14:30] by coming less chargeable, that's a revenue hit, and you go, "Can't do that." One of the hardest things of growth is about the identity change. You are no longer the doer; you're no longer the most important person there; and your value is no longer about how many chargeable hours you do. That's one of the really, really hard things because for everybody that's been in practice, what do they get- what's it they give themselves a dopamine hit. What is it about the things they're doing well? "It's about how much I've put on my time sheet that I've personally built." We're trying [00:15:00] to tell people that, no, it's not about what you personally bill anymore. It's about actually what we do in the round. It's about you being able to take back eight hours a day- sorry, eight hours a week, in order to grow your firm. This is part of the problem. It's the identity change ... Actually, it's the physical, tactical stuff of, "If I've got so much stuff, how do I move stuff on?" We micromanage. Accountants are brilliant micromanagers. What are we gonna delegate? What are we potentially gonna outsource? When it [00:15:30] comes to freeing up time in the UK, we have the hot buttons of what are you gonna outsource - whether that's outsourcing marketing, whether that's outsourcing what we would call year-end accounts, tax returns; are you gonna outsource that? Are you gonna sell a block of fees so that you get the capacity back and the thinking time? Because you sure as hell are probably not gonna- you're not gonna sell the profitable ones, so, yeah, you're gonna have a slight cash flow, but that will be whatever, or what are you gonna delegate? Those are the quick things that you have to do. Michael Palmer: Yeah, I think [00:16:00] capacity is an exciting thing to work on because not only what are you gonna fill the capacity with? It's not just having time to work on getting paid more for the work that you do, the valuable work that you do, but your own personal life, the things that you do. One of our guests on The Successful Bookkeeper podcast was Joe Woodard. He talked about getting a 20-percent capacity -increase your own capacity - every 90 days. [00:16:30] I you played that game- if you actually played the game of getting 20-percent capacity- more capacity every 90 days, what would you do with that? Well, it's work on mastering the art of pricing like we're talking about. It's working on figuring out how to become more efficient, outsource, delegate. One of the things we do at Pure Bookkeeping is how do you provide standard operating procedures and processes that actually has your business run more efficiently? This stuff is not easy to do. It takes [00:17:00] work. It takes time- Michelle Weinstein: Commitment. Michael Palmer: -right. It takes commitment, but the payoff, long run, long game ... The payoff is that you have a firm that actually runs itself, and you have a firm that gives you what you want. That's the question - why are you in business? What are you trying to achieve? What's that end game look like? Michelle Weinstein: I think that's the most important part because that- Michael Palmer: It's an incredibly important part. Michelle Weinstein: I call everyone that owns their own business an accountingpreneur. If you're gonna be an accountingpreneur, guess what? There's no one telling you what to do. I know that from [00:17:30] a lot of the people I've worked with, it wasn't ever, taught - this sales stuff, and capacity, and the mindset, and all that. You just have to do it. Most of the people I work with don't go on vacations, so that's the thing that I really focus on, is if you're gonna have capacity, also make capacity for leaving. One of my accountants, I think he did $350,000 in revenue extra in the last year and a half, and now he goes on a trip with his family like every three to six months. David Leary: How does somebody [00:18:00] actually get any capacity to take that next step to start building capacity out- Michelle Weinstein: You have to- David Leary: Because if you know you need to make processes ... Everybody's, every day, like, "I gotta create a process. I just need to standardize the process," and you never do it, and weeks, and weeks, and weeks go by. "Oh, I need to have a conversation with my clients about billing." Weeks, and weeks, and weeks go by. What's that very ... Somebody listening to this podcast, tomorrow, can build them self an extra hour into their day, what do they have to do? Michael Palmer: Time blocking. Michelle Weinstein: Yeah. Heather Townsend: Definitely time blocking, where you have a default diary that says, "All right. These are the things I have to do, and they will happen on this day. [00:18:30] I will put out this amount of time." Interestingly, we had someone that just joined the club, and they spoke to us about joining in February. It's now November. They were gonna do this, and this, and this and then join. Michelle Weinstein: They didn't do any of it. Heather Townsend: You're absolutely right [crosstalk] Michael Palmer: They did that incorrectly. They should have joined first and then [crosstalk] Heather Townsend: I know we're coaches, and I know this is our mantra, but most accountants have got comfortable being uncomfortable and, actually, we need to challenge the status quo. That means you've gotta tap into your why. Why are you doing this? Why [00:19:00] now? For most people ... I've had about three or four brain dates today talking about increasing pricing. I asked one lady, "Why now? You've been thinking about this for two years [crosstalk] why now?" She said, "My husband has got sick, and he can't drive anymore, which means I'm fridge-filler, taxi driver, and an American, so that means you can't walk anywhere, for my two kids, and they're telling me I'm working too hard, so that's why." You've gotta connect into what is my big driver that's gonna take me through the fact [00:19:30] that I'm comfortably uncomfortable? We have a phrase in the UK, called BMW, which is a car, and I'm gonna do the polite version of it where we, as accountants, we 'bellyache, we moan, and we whinge,' and that's our norm. Michelle Weinstein: That's good. Michael Palmer: I've never BMW-ed. Michelle Weinstein: I think that's a huge point of it, too, but here's the other point. If you're an accountingpreneur, you signed up for this journey, so you get to stay up two extra hours later and sacrifice a short [00:20:00] amount of time to have the upside that you want in the future. David Leary: Maybe a little less Netflix. Michelle Weinstein: It's less Netflix ... You have to cut somewhere in order to gain, right? It's a short-term sacrifice for a long-term payoff. Michael Palmer: Here's a liberating concept. I love this concept. It's from a book called, "The One Thing," a fantastic [crosstalk] right? Where am I going with it - "The One Thing?" What is the one thing that you're gonna focus on that's [00:20:30] actually gonna make, when we connect back to the why, as you're both saying, you connect back to the why, what's the one thing you're gonna focus on? In the book, one of the concepts is, "Well, do you drop everything?" No, you just start focusing on that that's most important. If pricing is one of the things that you've been talking about wanting to do, make that the focus and let that happen. The other piece is that people say, "Oh, look at that person. They've got all the pricing figured out; they've figured their business out; they're so disciplined; they're [00:21:00] absolutely amazingly ..." No, they're only a tiny, tiny bit more disciplined. It's that they just had enough energy, enough disciplined energy to actually get the habit together to do the things that are just a little bit better than the average. That actually has them compete on such a high, high level. If you're gonna take anything from that is stop beating up on yourself for not doing something. Focus on, well, what's the one thing you're gonna do next week and [00:21:30] just focus on that. Let everything else fall to the wayside and see what happens. It'll change your life. David Leary: On that note, we should let our listeners stop, and they can go do their next step building some capacity. Michelle Weinstein: Yes. David Leary: What's the best way to get a hold of you, Michael, if people wanna learn more? Michael Palmer: Go to thesuccessfulbookkeeper.com and start listening to the podcast. Blake Oliver: All right. David Leary: Michelle? Michelle Weinstein: Theabundantaccountant.com. Heather Townsend: Heather Townsend. Come to my website www.accountantsmillionaire.club. Blake Oliver: All right, wonderful. David Leary: That'll all be in the show notes. You guys can drill down and [00:22:00] click on it. Blake Oliver: Thank you all so much for your time- Michelle Weinstein: Awesome. Thank you for having us! Blake Oliver: Thanks for joining us [crosstalk] Michelle Weinstein: That was so fun! Blake Oliver: Bye. David Leary: Bye.