When it's time to sell, will your CPA firm be worth what you expect? A good insurance for that valuation is to have in place a complete client-acquisition system & added value services...

Accountancy Marketing Newsletter

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CPA Marketing Newsletter: Increasing the value of your practice

Modern Accountancy Marketing & Sales Course

CPA - Accounting Firm Marketing Newsletter:
Increasing the value of your practice

In this issue, we will discuss the tested and proven techniques for achieving a CONTINUOUS increase of value for your practice while augmenting the monthly billing at the same time.

Essentially, there will come a time when you'll want to cash in your life's work and sell the practice. And at that point, the burning questions is whether or not it will be worth what you had envisioned.

Valuation can be a crushing experience or it may be a positive surprise. As an accounting expert, you know the basis of valuation and thus you can prepare for that day.

The income of your CPA / accounting practice — and the degree of confidence for its continuance that can be proven to a potential buyer — will determine the value of your accountancy firm.

So let' have a look at this important subject - and sorry that it's a rather lengthy issue for this is not a short subject!


Methods of increase the value of an accounting practice / CPA firm

The most fundamental method of increasing the value of your CPA firm / accounting practice could be called boring, tedious and even unrewarding on short-term basis.

It is the good old plan of increasing the number of your clients and increasing the per-client income and profit margin little by little, year after year.

This is what we attempt to do, of course. But it is tedious and not lacking of problems.

Yet, it's the best of all methods and, if you know how to set it up and what to ADD to your systems so it becomes virtually AUTOMATIC, then its rewards are nothing short of amazing.

Now, I'm talking about a system that will standardize these functions and become a set of tools that the future buyer can inherit with your firm so HE, too, can be certain of future growth.

Such a system will not only increase the value of your practice at a rate you've never seen before but also increase your monthly billing CONTINUOUSLY from one month to another, year after year.

This "magical" method is not dependent on chance, luck or even current trend of economy. Your knowhow is unique because it is needed during uptrend as well as downtrends.


CPA firm valuation: Adding a practical step-by-step client-acquisition system with a difference

The most effective way to increase the value of your practice is to increase the number of active clients.

But that's not anything special, of course... unless the system you choose enables you to increase...

- your per-client-billing average
- your profit margin from each client
- the average length of client-relationships

... while at it.

The harsh competition withing accounting service providers puts a tight lid on hourly rates. There's a glass ceiling there and clients will predominantly choose the lowest-cost accounting service.

This is known to everyone, of course. And there'll always be a few practitioners selling their services at bargain-basement prices in any given area.

So what can you do?

Well, you can specialize, you can create a service model that will be perceived as extremely valuable AND completely UNIQUE by your target group.

Or, if we're to be accurate, "that segment of your target group whose goal is to be successful and who can appreciate the expertise of others too."

Frankly, the biggest segment of business owners will always seek for the lowest quote on accounting. But what you don't know is that this segment is NOT EVEN 50% of all businesses.

I know you find this very hard to believe. I understand that you've had quite a few disappointments in trying to make people understand the true value of your expertise.

But the fact still remains that more than half of all business owners are genuinely interested in QUALITY of consulting rather than attracted to the lowest cost.

Yet this interest is but POTENTIAL for the time being.

It's there, I can tell you, for I've surveyd thousands and thousands of business owners and some 68% want it... if you help them understand the format of the consulting.

To tap into this vast potential you need to TRIGGER that interest with a very specific set of tools so it is communicated in such way (and in such step-by-step manner) that the average business owner fully UNDERSTANDS.

Of course, you also need to HAVE the service model that delivers what you promise.

And THEN you'll have pull for your service. And expansion, increase of profits, increase of per-client income... the works.

And then you've installed the system that will double, triple or quadruple the factor by which the value of your CPA firm or accounting practice increases its value.

To achieve this, certain basic policies need to be formed. Here are a few suggestions:


1. A step-by-step CPA client-acquisition system

A permanent system for obtaining new clients continually must be based on a step-by-step system. It must also be based on ready TOOLS — such as scripts, forms, interviews, letters, policies, plans, that spell out how each step is performed — to have any value.

Value comes from permanence and continuance. Hire a brilliant salesman, go into a project with someone else... and you've made yourself totally dependent on the continuance of these people.

But set up a system that TELLS PEOPLE WHAT TO DO, how to do each step, spells out each sentence they need to say, gives clear and unequivocal instructions on how to do every phase... and YOU will be in control, YOU will have the solution...

...and you will be independent of anyone else. The system becomes part of your accounting practice, a tested and proven "machine" you can start and stop at will...

...and that's VALUE for you and for the future buyer of your CPA firm or accounting practice.

In other words, you need several smaller systems following each other and with each feeding "raw-materials" to the next system.

There's no magic pill that would handle it. You need to "think big" but in terms of "small, consecutive steps" and "lots of contacts on a level casual enough for ease and success."

First in this chain you need a system for finding business owners who are thinking of changing their CPA or accountant... or who are ready to BEGIN thinking about it.

This system feeds leads to the next system which could be interviewing the prospective client on the telephone to find out what he really needs and wants from accounting services.

A few prospects will drop off here and the rest are "fed" to the next phase - a meeting with you at your office.

The meeting then has its own agenda, carefully planned to induce as many new realizations for the prospect in terms of what he could do with his company, how much more he could get out of his hard work.

There are tools that allow you to remain in a consulting role without having to become a salesman... and yet achieve the "impossible:" Have most business owners sign onto your services right then and there, without going away "to think about it."

There are systematic instructions on how to start each client on an added-value service and stabilize them... and then sell more to them "without selling" (they'll be ASKING for it)... and you will NOT SELL HOURS but something else, allowing you to pass through the glass ceiling of hourly rates.

There are systems that make it easy to pass each phase to others, including the consulting, so that you can expand and not have every client demand YOU as their accounting expert.

And so on, step by step.

Every step documented in detail, with clear-cut instructions, with troubleshooting tools... everything that's needed to perform each step successfully WITHOUT ANY PRIOR KNOWLEDGE OR TRAINING (except the consulting part, which does require knowledge of accounts of course).

You can hire a person, brief him for an hour or two... and have him at his desk PRODUCING RESULTS that very same day.

It's that simple when you have all the tools.

This system will soon establish definite success ratios for each phase. Then it's simply a matter of mathematics:

Ensure that the first phase produces ENOUGH leads monthly so that you get 1-3 new clients out from the other end of the system on regular basis.


2. CPA marketing system: Use on what's proven

Marketing is an art as in "skill"... but it's NOT art as in "creativity roving freely."

It's a skill whose principles MUST be based on tested and proven tenets the way exact sciences do.

If you want success, you have to test, pilot, research, troubleshoot, tweak, retest, repilot, research again... and so on until what you have works uniformly, always producing the expected results in a viable range of quantity.

For success, creativity MUST be put in the service of evidence, and it must pass the test of producing the expected results consistently without variation.

A tool worth its name works the way it should, fixing the problem it should, producing the expected results EVERY TIME if used correctly.

A wrench opens a nut if used correctly, every time. A hammer drives the nail into wood every time, if used correctly.

So why would you accept a prospecting tool or a presentation tool or a sales tool not to pass the same test?

Don't accept it.

Use only what WORKS.

The temptation - and the principal error - in marketing is to keep creating new approaches, letters, ads, presentations, phases, tools and whatnots before the old ones have been tested... or, as often is the case, without regard to the fact that the old one

Yet another trick is to fall for "interesting new ideas" developed by some bright person. It's fine if all you want is mental stimuli, but do remember those ideas have NOT been tested, researched, piloted, nor proven in practical use.

They're interesting. They're ideas. And, I'm sorry to say, they're equivalent to a hammer with a balloon for a head, a wrench knitted of wool, or a jackhammer built of rubber.

They can create some interest... but they don't work with any consistency or viable ratio of success.

So don't go for untried, untested or unproven systems.

And don't go for ideas which leave YOU to figure out how to sell them...

This applies to your ideas as well, I'm afraid. Don't use them before you've tested their functionality and improved them until they work uniformly. And if you can't get them to work with any acceptable degree of prediction, drop them.

Otherwise you're simply wasting a lot of money and time. No point hiring a carpenter and paying for materials if he can't drive the nails into the wood. Nothing but wastage is going to ensue...

There is a kind of "creative frenzy" in which we employ new ideas continuously. While those ideas may be great, the effect is caused by the fact that these are NEW, UNTRIED, UNTESTED and UNPROVEN changes to a system that works.

If the system DOESN'T work, the problem is with some individual phase or part of it. It needs to be found and adjusted, after which the system will work.

But if you throw everything away or change without testing, it becomes a very confusing (and expensive) mystery.

Go with what's been tested and proven to work.


3. Select a CPA system based on your strengths

As an accounting professional, you have many highly developed
abilities and skills.

Choose a system that bases its foundation on your strengths and natural abilities rather than something that requires you to become a master of something that's NOT within your natural abilities.

If it's based on your strong points then it will work. You will use it because it accentuates your abilities. It feels GOOD and it produces results.

If you choose a system that forces you to do something you don't feel comfortable doing then it's based on our weaknesses, not your strengths.

Honestly, a lot of the guides and workshops and whatnots offered to CPA firms and accounting practitioners can be summarized in two sentences.

They'll ask you "What is it that you do NOT want to do?"

Once you tell what it is, they'll say: "That's what you have to do!"

Of course, it takes them 2-3 days to do this at a cost of 2-3 thousand dollars to you... but that's it in a nutshell. They say it nicely, it's all intriguingly INTERESTING... but that's the meat of it.

Obviously, if you did not have that aversion doing this thing you would not have searched for help in marketing and/or practice management and/or development in the first place...

My bet is that you feel relatively confident about understanding finances, being able to notice opportunities and problems in someone's books, analyze their finances and give advice in various situations relating to accounting, finance or taxation...

These are among your highly regarded and sought-after skills which business owners need and want from you.

Thus, the system you acquire for client-acquisition MUST BE BASED ON THOSE ABILITIES AND SKILLS.

It must UTILIZE those skills in the main. It must allow you to obtain new clients and sell more BEING A CONSULTING ACCOUNTING PROFESSIONAL and nothing else. If you're required to become a motor-mouthed used-car salesman... forget it.

You're not going to use the system. And even if you do, its results are based on your weakest areas... so the odds are dead set against you from the onset.

But when we speak of a marketing system that WORKS and is based on your abilities, it would have to be based on your superior capacity to keep things rolling, make corrections when needed, implement vital activities into weekly or monthly routines so they get DONE... that sort of thing.

That's exactly on what your Modern Accountancy Marketing Course is based, actually. If you ARE an accounting professional then you will be successful with this system because it does NOT require you to become a salesman.

Thus, choose a system that's tailored for your strong points, making it reasonably COMFORTABLE to use and without the need to face your greatest discomforts or produce impractical miracles to achieve results.

One could say that the more "boring" an effective marketing system is then the more DOABLE it is... and the more likely it is to produce results because those who are supposed to USE it will be able to do so... and will want to continue using it.


4. Choose a CPA system that's inexpensive to run

Marketing is a long-haul activity. Results can rarely be whipped up within days or weeks - and even then, the system shows it true results only if used CONTINUALLY for several months.

Obviously, this requires that your system is inexpensive to run.

The cheaper the weekly cost, the better. It needs to be low cost to keep going so that you can afford to keep it going and adjust it until the results start rolling in. It takes usually about six weeks minimum to start BANKING any money from even the best marketing campaign. And that's if you're lucky... and that's the first of any kind of money.

Thus, it can take 8-12 weeks or more from the moment you start USING the system (outflowing) until you have a hope of receiving money that could sustain the system.

Of course, most system NEVER repay the investment in any such way that could be logically backtracked to the expense. That's because most systems offered have no tools that could be used straight off.

Thus a motivational seminar (the one where they tell you to do that which you don't want to do - grin!) can definitely bring you a period of heightened activity... but it's YOU who does that, not the seminar, see?

So, choose a system which won't require big investments and which CONTAINS the tools to use in ready-to-start format so you can start without long preparations.

That way, it won't disrupt your daily routines much and risks are practically eliminated... and you can keep it running continuously.


5. Select a CPA system you can run indefinitely

And that's the last point — choose a marketing system which can be kept going indefinitely. It needs to be such that it won't disrupt your other duties, tasks and routies in your accounting practice.

It needs to be such that it doesn't require a lot of time weekly.

Once you have a system like this you can then keep it going indefinitely.

Or, to be more precise, keep it going on and off indefinitely. The system must be such that it can be turned on and off without totally disrupting it.

Unavoidably, there will be times when the pressure for delivering to all these new clients invites you to put the marketing on hold.

But the system must be easy to RESTART. Quick and easy so the future owner can keep using it... and, above all, can see that he can when he evaluates whether or not to buy your firm.


Successful increasing of the value of your CPA firm / accounting practice

Truly intelligent marketing is really all about increasing the value of your CPA firm or accounting practice so that it will be worth what you expect when it's time to cash in.

To ALIGN your short-term goals (more income, profits, more and/or better clients now, next month next year) to build your long-term objective of adding the value of your practice, you need a system that does just that.

The system must be functional, easy to use, easy to turn on and off, something that's based on detailed ready-to-use tools so anyone can use it instantly and the successful actions remain there... something that's based on your STRENGTHS rather than weaknesses and is inexpensive to run, requiring as little time as possible.

Your Modern Accountancy Marketing & Sales Course is tested and proven and it was originally PLANNED to align these two sets of goals of an accounting firm.

So it might be worth you while to read (or reread) the presentation of the Modern Accountancy Marketing System from this viewpoint. Compare the cost with what you can achieve by gradually implementing user-friendly systems into your practice, systems which in themselves and through their results will continually increase the value of your CPA firm / accounting practice.

Increasing the value of your practice with these principles is a very worthwhile goal whose positive consequences will multiply with time.

Whatever you do, give some thought to the principles introduced in this issue of your CPA Marketing Newsletter. Who knows, this could be the start of a permanently higher billing and value for your practice!

Keep up the good work,

Best wishes,

Harry Kafka
HDK Consultants U.S.A. Inc.
PMB 211, 411 Cleveland
Clearwater, FL 33755
Phone (727) 474 1206
Calls from outside USA: +1 727 474 1206

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HDK Consultants USA Inc.
HDK Consultants U.S.A. Inc.
PMB 211
411 Cleveland
FL 33755
Phone (727) 474 1206
Calls from outside USA:
+1 727 474 1206

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