working with “smaller” clients can often be more rewarding – and profitable – than “big” clients.
by frank stitely
the relentless cpa
there’s a reason you aren’t actively training clients to allow you to work efficiently. you’re afraid that you’ll lose clients.
i guarantee that you will.
more: control your time: avoid ambush meetings and calls | get clients to bring tax docs early … yes, early | why time tracking still matters | make fewer mistakes, increase revenue and capacity | six ways to create a millennial-friendly firm | do you know your turnaround time?
exclusively for pro members. log in here or 2022世界杯足球排名 today.
clients have trained you to be inefficient. they’ll resist retraining. some of them will leave and infect someone else’s practice.
the reason you fear losing clients is that you fear you can’t replace them.
that’s a marketing problem.
this isn’t about marketing. however, here’s frank’s rule of marketing: revenue cures a multitude of ills. many of you shut down your marketing efforts years ago. you stopped marketing because you feared that you couldn’t manage growth.
you couldn’t manage growth because your existing clients made you inefficient. you need a steady stream of new prospects so that you can select the ones who add value to your practice. a steady stream of new clients removes the fear of losing the bad ones. in fact, you’ll want to fire the bad ones.
a couple of years ago, i inherited a large-revenue client from my retiring partner. we billed them nearly $18,000 per year on a fixed-price contract.
my retiring partner had dealt with the owner for years, and they had a great personal relationship.
i took over the relationship as the owner retired and passed on the company to his sons. in the middle of my second year with them, i had some serious misgivings. first, they weren’t a very profitable client for us. i was unhappy with the time we were spending on what seemed like a never-ending growth in new tax returns for us to prepare. they were also sensitive about price.
worse than the money, however, they wouldn’t take advice, and then they would complain about the consequences. one of the sons wanted to decide when i could take a vacation because he wanted to close his books in mid-december – not the end of the year. why? he wanted to take a vacation the last week of the year.
how many red flags does one need to know this is a bad client?
apparently, i needed one more.
i had a phone call to discuss a draft tax return with one of the sons.
he said, “you don’t know who you’re talking to.” yes, i did. i was talking to an ex-client.
we have a steady stream of new clients that gives us the freedom to say no, even to a big-revenue client. i would rather have four $4,500 clients than one $18,000 client. large clients think they own you and want to control the relationship. that’s how you end up doing bad things.
our saying is, “we’ll replace them by close of business today.”