help your clients and maybe learn about your business as well.
by sandi leyva and michelle long
here is how to make more from working less: offering financial literacy and financial services to your clients. they need this so much.
more small firm growth strategies: why businesses offer subscriptions | welcome to the subscription economy | ed kless: what is strategic pricing? | marketing vs. sales and how to plunge in | 5 steps to get clients to say ‘yes’ to cloud applications | when you should answer questions for free | when to turn over client data files | the dreaded ‘quick question’
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we’re going to talk about two ways to avoid so we don’t turn off our clients about this. it’s easy to turn off our clients and easy for our clients to get blocked. so we’re going to talk about turning off some blocks.
one way to connect with clients to hear us better is communicating our value and also owning it. i’m going to share six literacy topics that are common and you all know and have knowledge about, but the client needs desperately. if you’re not going to help them with this who is? you’re the financial experts and clients need our help.
we need to stop being reactive and we need to stop being compliance only. we can really make a difference in the small business client’s lives. we’re also going to talk about three categories of advisory services and the blocks as well.
there are two ways that i’ve seen where clients are a little bit turned off by things and one way is if we start talking about debits and credits and depreciation. there are a lot of clients who get overwhelmed quickly and feel very inadequate about finances because they connect the whole field of accounting and finance to what they earn and may not feel comfortable with what they earn.
here you are the bookkeeper and you’re privy to what they earn and some people don’t like giving away that knowledge. it’s very intimidating the position you hold and we may not realize that but please realize that some of our clients might be a little intimidated by us. it’s important to make sure we don’t use a lot of textbook jargon that won’t help them generate a profit.
for them, knowing about depreciation, is that going to help them make a difference in their major pain point, which might be increasing revenue? i’m not sure and i think there are probably more important things that you can teach. there are a lot of things not useful to know and just think about a college education and all the stuff you’re not using anymore. i think maybe some of the audit concepts are still useful from a control standpoint but i’m sure never going to be an auditor. so i don’t think i need to know about sample size and confirmation letters, and neither do our clients unless they’re in the middle of an audit.
i like to be results-oriented and if it doesn’t lead to generating a profit it probably shouldn’t be in the lesson we’re having with our clients.
i used to be very insecure and when i was in my 20s, i remember on purpose trying to use a lot of smart words so people would think i was smarter so they would like me. i think what is really important is that we realize that when we are using all those big words that it actually separates people from you. it makes you stand out and doesn’t increase connection. so we need to think of activities that are going to increase the connection between our clients and us and not do the opposite, which is what i did.
the fix is to make sure everything you share and teach is actionable and bottom line-focused. i think we can sometimes get carried away teaching software for software’s sake.
i see this a lot in vendor presentations where they demo the software and it’s like “okay get on with it” and “i probably knew how to do that in second grade” and “don’t cover this because i’m never going to use it but cover this one.” sometimes it’s hard for vendor employees to be connected with what a small business needs if they work in a large shop. that’s a skill some of you have already picked up and some will pick it up. it’s important to know that they don’t need to know every feature, like going through all the settings for quickbooks, and some of you don’t bother your client with that, you just do it.
what is the most time-saving thing? the fix will be using live client data instead of sample data. then watch how the client works and make suggestions. look at their chart of accounts and ask them to do their most routine tasks and see if you can make improvements there. again i think a lot of you who are trainers and love to teach and a bit advanced have really taken care of this well. to me, this is part of the literacy and part of helping your client with more than just compliance.
one way to connect with clients is definitely going to be helping them with their biggest pain point. you can define this in a couple of ways. you can define this from what is their biggest accounting pain point, what is their biggest financial pain point and biggest business pain point if you want to start becoming more of a business strategist.
sometimes clients can’t hear you because they’re busy and feel they don’t have enough money to focus on anything else. let’s talk about what the most common pain points are for all the different clients you may have. there is some rhyme to reason on this different pain point.
depending on the size of the business, everybody starts by having revenue challenges. for three years typically your practice isn’t full and so the thing you need the most is revenue and it’s focusing on marketing and learning to see what works, learning about what your elevator speech is, your value proposition, understanding a bit more on pricing, but it’s still all marketing and the thing they need is to increase revenue. most of you who have business clients under $1 million in revenue and many have clients under $5 million, those sized clients almost always have revenue growing pains.
once they get past the $2 million to $5 million mark, they start to have a different type of challenge. a lot of times it’s cash flow or sometimes it’s staffing. when you hire your first person, your fourth person and i believe your 11th person there are certain points as you’re growing your staff that are harder than hiring your second or fifth person. these have all been proven and there are studies on these. every business is a little different but there are some commonalities in terms of growing pains and how things happen.
so you have cash flow again like i mentioned, making payroll and getting used to that and making sure the revenue is growing as the staffing is growing. then once you get over 10 employees, collaboration and teamwork tend to be struggles. you’ve got to start developing processes earlier than 10 employees but you have to start working with people so they move together as a team and build the culture, etc.
think about the size of your client and which pain point they’re going through. when you connect with that then you’ll be able to understand how you can approach them from an advisory standpoint because you know where their head is at and what’s keeping them up at night.
let’s talk about these in more detail. if you have clients who have revenue issues, some things you can help with if you do forecasting or income statements, budgeting, then you can make a revenue budget. i like the word “plan” better than “budget” cause budget sounds like you need to cut something out. that’s just me.you can help the client measure the revenue by either service line or group or product or geography if they have multiple locations or things they sell. you can teach them how to set up classes. i’m sure many of you have already done this kind of thing.
you can also help them evaluate their marketing return on investment. you can teach them how to manipulate the income statement as they are coding and use classes or categories or whatever it is in the software you’re using and break out some marketing channels and figure out the roi on the marketing. you guys who are fabulous number crunchers can do this and this is a way. i know some of you are scared of marketing and feel inadequate yourself, but this is helping them with marketing metrics and revenue metrics. sometimes when it’s in black and white, just running the sales by customer summary report and letting them get clear on who their top clients are and where the revenue is coming from is a real eye-opener for clients.
what percentage of your clients would you guess knows their cost per client acquisition? how much does it cost to bring a new client on board? you might take a loss. consider the lifetime value of a client. some of you are scared to death if you don’t break even the first month. that’s a very rare business model where you do break even the first month.
i don’t know what our break-even is and if i did i probably wouldn’t share it but i can tell you it’s not the first month. when you do a subscription website with us, it will take a couple of months before we break even on your business. so we’ve got a couple of services that are priced on the subscription model where the break-even isn’t in the first month.
the first time you hear that you think, “how risky.” you guys are very risk-averse but it is something that’s changing now and you can help communicate with the client and help them figure out if they have a subscription model and what their break-even is in months. i can ask a software company that and they’ll know, but can i ask some of you how many months does it take doing bookkeeping for a client before you break even on it? that’s something you might want to ask yourself in your own business.
who will know? who will teach them? you’re their accountant…who is going to teach them this stuff? we’ll teach you and you can teach them, is that a deal?
if you watch the tv show “shark tank” you understand what cost per client acquisition is. that’s the first question an investor will ask…what is the lifetime value? what is the cost per client acquisition? i don’t care if you’re on a subscription model or not, we need to learn these metrics.