|Is there a way to increase the profits for accounting services and yet also get more free time to enjoy the fruits of your hard work? This Profit Catch 22 seems unsolvable, but then again...|
Increasing CPA Firm Profit Margin
Increasing CPA firm profit and getting more time
|isn't all that easy. You cannot price your accounting services indisriminately. The more clients a CPA has, the less time he has to enjoy his earnings. But what if you could increase your profits an average of 22 percent - while getting MORE TIME to enjoy it, too?|
The Profit Catch 22 of CPAs and how you solve it & get BOTH time and money to spend?
Time and money seem to create an impossible equation for any accounting professional with his or her own Practice.
Your don't sell time but the services take time to deliver and you charge by the hour. The more work you get the less hours you will have. There are only so many hours in a day, week, and month.
Out of this comes the rule of never having BOTH time and money at the same time. The more of your time you sell, the more money you get. The more money you get, the less time you have for yourself.
Raising your hourly rate and rates in general is one way to deal with it. But as you know, it is a limited process - you can raise your hourly rate only so much until you start losing clients (and stop getting new ones).
Very soon, you cannot keep raising your prices and reach a point where your profit margin stagnates -- or even falls, with the new costs that servicing more clients can bring. The profit margin will stay at a certain figure, whatever the percentage for your Practice.
Now if you want to increase your dollar profits you just have to get more clients and more hours to deliver. Which is not going to solve your time problem, quite the contrary. Once you reach the point where you have to hire staff your profit will most likely take a dip of (hopefully) short duration. Then you need to get MORE clients to get the dollar profit up to the previous level.
Unless you are a very clever organizer, hiring others will usually mean MORE work hours for yourself. While your staff does help carry the load of many routines, it also requires managing, training... all types of time consuming tasks.
Increasing your revenue means more work, more hours spent at work. It also means more dollars... but no time to enjoy the fruits of your hard work.
The Catch 22 of CPA & accounting firms
The Catch 22 then, is not only about profits. It is about your LIFE. It is the time-money -syndrome, where you never have BOTH: If you earn a lot of money you won't have quality time to spend with your loved ones or your hobbies - time off is something you cannot really afford.
Most CPAs just shrug it off - they'll get time when they retire. Some fight it... and then give in. Some quit their Practice and take a well-paying nine-to-five in some bigger corporation. Some even leave the Industry altogether.
If you stay on the roller coaster, one of these Tax Seasons you might get FED UP with the constant stress and hard work, late nights at your desk when everyone else is with their families... or you may HAVE to take time off.
This will usually mean you lose business and after you return the same rat race of selling-money-time goes on - only now you need to start all over again. And you'll have even fewer opportunities to enjoy life.
So there you have it, the number one killer in accounting industry. If you've just started this is certainly totally unreal to you. But if you have been around a while you know exactly what I'm talking about.
Either way, the Catch 22 of accounting industry will catch up with you eventually. Stress, figures, having to be thorough and meticulous when your schedules are CRAZY, late nights, bad snacks... bank account growing at an agonizing pace. Fears, upsets, gloomy outlook on the possibilities the future has to offer... you know.
Does it really HAVE to be this way? Is there really NO WAY OUT of this? What about a thing called the Quality of Life? Are accounting professionals excluded from that deal altogether?
Winning the game
It takes some faith in yourself to be able to beat this thing. Why? Well, because it is not the kind of monster it appears to be. The power it seems to have is derived from... YOU. That's right... you keep it alive.
Granted, there are a LOT of things that you cannot presently change. How could you change the Tax Season? How could you change the realities of life -- the way things ARE in this world?
How? Well, by DECIDING you want to change them... and by allowing ENOUGH TIME for the change... and by HAVING THE TOOLS to change it.
We have consulted hundreds of accounting professionals - all of whom own their own Practice. Therefore, we KNOW how it can be... and we have also seen how thin the skin of this Catch 22 really is - it is astonishingly easy to penetrate. And once you do, it is nothing but... hot air.
It won't happen overnight or in a couple of months. There is no magic wand or wonder pill that would just make it happen. You do need some tools and a very clear plan to adhere to. But most importantly... you need to make the decision to change it because without that, nothing will change.
First of all, you need to know what the component parts of this trap are. Amazingly, there are only TWO main causes for the Profit Catch 22 of Practices!
1. DON'T FOLLOW EVERYONE ELSE
The first thing that causes this trap to be so tight is the tendency of any Industry to do what everyone else is doing. Obviously when it comes to accounting and regulations you do what is standard and correct. But why would you do everything ELSE also the same way everyone else does?
Well, of course you have things developed yourself; your routines, policies and so on. You may even have specialized in some aspect of accounting or in some industries.
However, we are talking about something else here.
There are some things you should look into. These things include
Getting a lot more business clients on monthly service
Doing a good part of Tax Season work during the whole year
Opening your mind to what you can ask from your clients and what you can sell to them
If you decide to change your client structure so that you have a LOT more business clients and create a system whereby you only take on those business clients that are willing to pay for a MONTHLY service, changes will occur. These changes will include all the other items on the bulleted list above - they are all related.
Of course, it will take some TIME and a workable SYSTEM to get a lot of new business clients.
You could quite easily get say 3-5 new business clients every month - and of the kind requiring monthly service - if you started a project getting them. We know, we've seen it happen so many times. And we are now talking about the 1-3 staff Practices, mind you.
Let's assume for a while it would be possible. Let's say you have some 20 business clients presently out of which maybe 2-4 are serviced monthly, the rest being quarterly or more seldom. Within 6 months you would now have 12-25 new business clients requiring service EVERY MONTH.
Obviously, you could prepare their books to a degree for the Tax Returns ahead of time. Obviously your monthly income (outside the Tax Season) would increase many fold - and this is only the first six months we are talking about.
Okay. Now that within a year you would have around 30-45 business clients that you service and invoice monthly. So far - only more work, right?
Fine. Next take in the third point on our bulleted list above - opening your mind to new ideas as to what you can offer and sell to your clients (business clients in particular).
Suppose we added a new factor to the equation here - a factor of a new service, which you could deliver to these business clients (every single one of them!) and which would bring in an average of $75.00 per client per month... and require 15 minutes of work from you, tops?
Mind you, we are talking about a fee ABOVE what you charge of your write-up and other services!
Let's see. If you had 45 new clients, each of them paying an average of $75.00 a month... 45 times $75.00 times 12 months...wow! Not bad, wouldn't you say... especially since it only takes you less than 12 hours to deliver this each month!
And, if you charge an average of $200.00 per month for the write-up work and all that goes with it... well, 45 times $200.00 times 12 months is not something to look down on, is it? In fact, you could be DOUBLING your revenue in one year... not to say anything about your profit margin!
Okay, okay... so you don't believe it. Well, please read the third item on the bulleted line again: Opening your mind to what you can ask from your clients and what you can sell to them! So, OPEN your mind.
Let's go wild here. Let's dream on even further. Let's suppose that this service and all parts of it - from selling it to delivering it - would be written down so clearly and set into such easy-to-use tools that you could train any junior to do it successfully within a few days.
NOW, DO YOU BEGIN TO SEE SOME LIGHT AT THE END OF YOU CATCH 22 TUNNEL?
Just hold that thought for a while. After all, it is really a nice though, isn't it? Even if it would be just a day dream... wow! Just hold the thought while you read through the next part. IT WILL BLOW YOU AWAY!
2. SEPARATE YOUR INCOME FROM YOUR HOURS WORKED
If you are EVER going to get out of the rat race, Profit Catch 22 or the Number One Killer - call it what you will - you are going to have to start making use of your TRUE POTENTIAL AND VALUE!
Now, here's where we will be very blunt: You are NOT utilizing your true potential. You are NOT capitalizing on the true value of your services.
Don't get me wrong - I'm are not accusing you. I'm simply stating a fact you already know: Your TRUE POTENTIAL is a lot more than what you currently make use of.
If you want to beat the Catch 22, you need to open your mind to the TRUE possibilities and potentials that you actually have.
And so it follows, that you need to get rid of the hour-selling-business. You need to separate your income from your hours.
What do I mean? - You need to come with a bright idea on what it REALLY is that your business clients consider valuable about your services. It is NOT YOUR HOURS. Heck, they've got hours themselves.
If you find out what it is that they consider VALUABLE, you will have discovered also what they will gladly PAY FOR. Just keep it out of the time reference.
You need to sell things like HELP, AVAILABILITY and so on. And you need to keep them on monthly fees -- this support or availability costs this much per month, and once the month has passed, the service has been delivered.
Can you see how that would very soon give you FREEDOM from Profit Catch 22?
Can you imagine if you COULD sell this service reliably - in fact, get OTHERS to sell it with results - and if you COULD get OTHERS to deliver it...
Let's do a really WILD calculation here. Say you start this thing now and then we look at what COULD be in 5 years. You get 40 clients a year. In 5 years you'll have around 200 business clients. 200 times $75.00 times 12 months... WOW!
And here's the bomb: If you set it up just right, guess how many accountants or CPAs you need to DELIVER this (extra monthly) service?
YOU NEED TWO PERSONS.
Yes, yes, yes - to handle the write-ups you'd probably have to have at least 3-4 people more (unless you gave it to some freelancers to do). But can you see what the potential could be - and how there is practically NO RISK AT ALL?
OK. Sorry if this is a bit repetitious and perhaps even a bit boring for you. It is just that we have seen this happen so many times that we are REALLY EXCITED about it!
But you need the correct tools & added-value service to make it happen
To break through this thing you need PROFESSIONAL TOOLS. You need very specific tools that have been tested, piloted and proven to work by other accounting professionals in the same situation.
With a professional system like this, I've have seen miracles happen.
A special case comes to mind where a one-man Practice was slowly dying... had fewer and fewer clients, less and less work and so on. The CPA was down right pessimistic and did not believe there was anything that could help. He had tried it all - or so he thought.
He "knew" nobody changed their CPA so it was useless. He had all but begged the few referrals he had and not closed one of them in several months.
How we managed to sign him on as a client I still haven't figured out. But we did - and 12 months later you would not have recognized this fellow.
He LOOKED different - GOOD different. He had TWO practices now, both growing at a constant, safe and HEALTHY rate. Furthermore, he could now afford to CHOOSE which prospects he accepted onto his services!
Now, is that a change in outlook or what?
Once he found out about the special added-value accounting service that's one of the gems of our program, he took off like a rocket!
Today, this gentleman has BOTH time and money to spend. Oh, he is still a CPA, prudent with money as he should be... but his wife gets to see him a lot more and they actually spent a week at some exotic destination with palm trees, white sands and all that.
The point here being that the Catch 22 can be handled and it can be handled relatively FAST.
Part of it is in your own mind; success is said to be a state of mind... a vision of future state of things.
Here's the good news: While it took YEARS to get trapped by this Catch 22 it only takes weeks or a month or two of work to start to see a CLEAR DIFFERENCE.
The fact is that WHEN YOUR PRACTICE IS DOING CLEARLY BETTER, YOU ARE FEELING A WHOLE LOT BETTER, TOO!
There are definite things to do to break through this, yes. However, these steps exist. They are not theory but actual tested and proven steps of a whole program that countless CPAs and accountants have used to get into better times with more income AND time to enjoy it.
These tools and specific steps we have saved for the Modern Accountancy Marketing & Sales Course. Click the link to read more about this fantastic course that is based on actual experience and achieved results.
And do NOT give up... beating the Catch 22 is much easier than you believe. Being aware of it, you're already half way... so go ahead and finish it off!
|Which are the effective elements in a CPA service presentation and sales system - which parts are essential if you want RESULTS with certainty?|
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