start with “shock-and-awe” service and tie billing rates to clients’ topline revenues.
by andrew hunzicker
cannabizcpa.pro
to succeed in an accounting business in the booming cannabis niche, firms must be able to deliver real value to clients.
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it’s the first of five essential ingredients you’ll need in order to prosper because many ceos think of accounting and bookkeeping as a “cost” and a headache.
so your offering needs to be world-class, delivering “shock and awe” service to each of your clients.
you need to be able to educate yourself on their business, help them build a robust set of accounting policies, procedures, and internal controls,” provide them a complete month-end close package, with every balance sheet account reconciled, monthly consolidated financial statements, scorecards, kpi’s, and an effective rolling cash forecast. you’ll help them automate or outsource many processes including payroll and billing, and you’ll help them coordinate any outsourced work you don’t provide.
and here are four more essentials:
2. you need to be able to price your service based on your “shock and awe” value and tie your fee to a percentage of topline revenues. you must also demonstrate that the value you provide will be in excess of your fee. you will do this by understanding deeply the cannabis accounting and tax issues, being very organized, making sure their books are accurate, complete, and gaap/tax ready, and providing worthwhile end of the month reports, scorecards, and metrics. you will make sure they have a “perpetual data room” which means their books are audit-ready, lender-ready, investor-ready, board ready, ceo-ready, any time and all the time!
3. you need is a good team. you need to think of your firm as “a company” and not just “you.” when you talk to clients, use the term “we” and not “i.” it’s very easy to build a team of advisors and subcontractors for your firm. maybe you’re a tax expert but you hate bookkeeping and outsourced cfo work. or you’re a bookkeeper and don’t get gaap accounting or tax prep and planning. you simply build your team with a few vetted partners where you can outsource the piece of client work you do not want. additionally, you can add other local cannabis experts, such as attorneys, marketers, and lenders. these partners are easy to find and glad to work with you as you bring them new business. when the client asks what services you provide, its simple: “we provide full accounting and tax services to our cannabis clients, as well as a deep network of industry advisors.”
4. you need is a really good niche. cannabis is the fastest growing industry in the u.s. with thousands of companies starting each month and year. at the same, it’s the least served by mid-sized and large-sized cpa and tax firms due to federal and insurance issues. on top of that, accounting is complex, including multi-entity structures, consolidations, cost accounting, 280e tax considerations and more. however, these companies are well funded, often do six- or seven-figure revenues in year one, and are able to pay well for someone to help them deal with all their accounting, banking, cash, software, and tax headaches.
5. finally, you need is a good lead generation method for new clients. gone are the days of networking and meeting other “service professionals” for coffee to exchange leads. in cannabis, there are hundreds of industry events (in every state, every month), blogs, magazines, facebook groups and more. many states provide a list on their website of all cannabis applicants, including name and website. finding ceos in this niche to meet will not be difficult and you will contact them directly, explain how you “really get” their issues and problems, and can offer real solutions. linkedin, direct outreach, as well as “pull” methods, such as writing articles or speaking at events, will also get leads coming to you.
if you follow the above steps, you will significantly increase your odds of launching and establishing a successful cannabis accounting firm.