Increase profits by working less! There is not an Accounting firm on the planet that I have met in 22 years coaching firms that does not want to increase profits by working less.. Many of the firms we have worked with over the years are achieving more than $1M profit per partner whilst delivering 500 hours of client time. And it’s not that hard.
You see, if you want to drive your profits then the business model needs to change. In my experience the first thing you need to do is flip from pricing in arrears to pricing upfront (BTW, this is different to Value Pricing – more that that topic in another edition). Pricing upfront involves setting the price / scope at the outset and then communicating the price and scope with your clients and have them sign off on it. You are now directly incentivised to drive as much time out of the client job as possible. That increases your capacity. With new capacity you can re-sell that capacity for a new project or new clients.
With new projects the client has not bought it before so there is no price parity. With value pricing skills you can price that project at a higher margin. The output is a higher profit per client (transpiring into higher Average Hourly Rate) and more happiness. The image below shows the 4 step process. Line 1 is the old way, 2 & 3 is the change and the end result is line 4.
You may be thinking that the fee per client is too small or too large. That’s not the point. The point is that you’ll never make decent profits by pricing in arrears. The model needs to change.
How to implement this:
We have the tools, the methods, the education and the ‘how to’ methodology to make this a reality for you. To teach you how to do this (and around 47 other key strategies) I am presenting my landmark “Firm of NOW” seminar tour in Australia and the USA. It’s a full day of education on how to create a CPA firm that delivers >$1M profit per partner. I’d like you to attend. You can click here for more information and to register. Bring your entire team!