Tag: businessgrowth

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I’m worried about increasing my prices in case I lose clients

It’s a common fear but your existing clients will be less price sensitive if you are doing a good job.

Have a look at this example (numbers rounded for simplicity) of how many clients you can afford to lose without impacting your profit:

Before
• You have 100 clients paying £1,000 each so turnover of £100,000
• You make 50% margin so profit of £50,000

After
• Della comes along and tells you to increase your prices (see the last two weeks for how and why you should do this) by 10%
• You now have 100 clients paying £1,100 each so turnover of £110,000
• Your margin is now 54.5% so profit of £60,000 ie a gain of £10,000 because all your pricing increase is profit

But
• Some of your clients aren’t happy and 10% decide to leave
• You now have 90 clients paying £1,100 each so turnover has fallen slightly to £99,000
• But your 54.5% margin means that you are still making profit of around £54,000 so you are earning £4,000 more for only 90% of the work. Possible even less work because the price sensitive clients are usually those who are most demanding and often a pain to deal with.

In fact
• In this example you can afford to lose up to 16% of your clients and still make slightly more profit
• 84 clients paying £1,100 gives turnover of £92,400 and profit of £50,400 ie £400 more than at the start but for 84% of the work

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Why you need to increase your prices

A lot of business owners avoid increasing their prices, either because they’re worried about losing clients or because they don’t know how to go about it. Even when they know that they need to increase their prices it is too easy to procrastinate (I’m the queen of procrastination, I have all the excuses)

I’ll cover the ‘how’ in separate tips but today I want to talk about why.

We all started our business for a reason which broadly come into one of three areas:
• Profitability
• Build something valuable to sell at retirement
• Better work – life balance

All of these will benefit from having better prices allowing you to earn more money, increase the value of your business, or to earn more in limited time.

But the real benefit to our clients is that we will have time to provide a quality service. To do things properly and not cut corners. And to run a business that will still be around to help them in future years.

When we provide a quality service our clients benefit, they stay with us, and they refer other people to us. It’s a virtuous circle because everybody wins.

To create the business you want you need to charge the right prices.

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Have you got the right priorities?

I’m the first person to remind you that you need to work ON your business as well as IN it and I will only take on coaching clients who agree to commit half a day per week to working on their business, but I’m a business owner too and I know how hard that can be to make the time.

We’re always torn between things that earn money now and things that will earn money later such as marketing and business improvements. Not to mention that we’d like to spend some time on the things we enjoy.

I’ve written before about my default diary which includes time for marketing and my own business and personal development. I then allocate particular tasks to those slots. But if you truly want to improve your business then you need to learn to delegate and think systematically.

I love lazy marketing when I use one piece of content in different ways. I also know that my strength is in writing/recording the content and then my wonderful VA tidies it up and distributes it across multiple channels. Whether you’re reading this in our Top Tips e-news or a blog or on social media then she is the one who has put it there (with the help of some software).

My job is to prioritise getting the content out each and every week. When I tried to do the whole job myself it took four times as long so I only got around to it about once a month, maybe less.

Look at everything you do, maybe keep a rough timesheet for a week or month, then go through the list with a highlighter to see what could be delegated to the right person. Then find that right person.

Your priority should be the things that only YOU can do.

If you’re an accountant, you can find somebody else to do the accounts themselves and some of the marketing (I write a monthly content pack for accountants who don’t want to do it themselves) so that you can focus on being the face of your business. If you’d rather be the one doing the accounts, then find somebody else to manage your business. Don’t think that you have to be the MD just because you’re the majority shareholder.

To create the business you want you need to be clear on your priorities.

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Do you set boundaries?

I work with a lot of people who are overwhelmed in their business as they have bitten off more than they can chew. When we start working together it soon becomes clear that they need to improve how they set boundaries.

Here are a few ideas I often use:


• Practise saying “no” in front of a mirror. It makes it easier to say to a real person.
• Practise saying “no” without feeling the need to offer an explanation.
• Practise saying “no” with a polite smile
• Be clear on what you are willing to do for your clients. Your engagement letter should act as a reminder to you as well as to them of what you are contracted to do.
• When a client asks for something extra tell them “yes we’d love to help you with that and it will cost £X” (fixed fee or per hour)
• Do not discount your fees. You are not a charity. If people are struggling then reduce the scope so they do more for themselves eg we provide basic bookkeeping training videos if the owner is capable of doing this themselves
• Do not provide extended credit. You are not a bank.
• Set appointments in your diary to make time to do something for yourself
• Ring up an old friend and arrange to meet for lunch or an enjoyable activity. It will get you out of the office. If you’d prefer to be alone then book a facial or a massage or plan a bike ride with a nice cake stop.
• Set an alarm for when you intend to finish your working day and then leave your laptop on your desk when you close your office door
• Stop reading this and practise saying “no”

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Do you carry a condom on a first date?

I don’t know about you but I use social media for networking rather than selling. Like face to face networking I like to take my time to get to know somebody and find out what interests we have in common, exchange a little bit of information about our respective businesses, and to see whether we actually like each other. I’ll then arrange to meet for a coffee if they’re nearby or if we’re going to be at the same business event.

The other form of networking I’ve been doing recently is internet dating and, rightly or wrongly, I follow the same sort of format. I get to know somebody online before meeting up to see whether we get along in real life.

But both forms of networking have pushy people.

Linked In has the annoying people who connect with you only to try and sell you something, or to persuade you to give up your valuable time for a “free” software demo (hint: my time is a limited resource so it has a value). The online dating arena is full of people wanting to promote their “assets” by sending photos or wanting sex before you’ve even met for that first coffee.

Whether in business or dating, timing is everything. Please take your time to get to know people and don’t assume that people want to see the whole package before they have got to know you. A good relationship is worth investing a bit of time up front.

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How do you capture good ideas?

I am so annoyed with myself!

Last night I woke up with a brilliant idea for this article but I failed to make a note. Not surprisingly I had forgotten it by the time I woke up properly this morning.

I have the memory of a flip flop (or a thong as my Aussie friends call them which can lead to some misunderstanding). Usually when I have an idea I make a note on my phone so that I can then make sense of it when I’m properly awake. Or I make a voice note if I’m driving.

I don’t just keep ideas for articles, I also keep ideas of projects that I think will drive my businesses forward so I also keep a folder of ideas amongst my other documents. Far too many of these are on Excel as that’s my app of choice as an accountant but it doesn’t really matter as long as they’re out of my brain and stored somewhere reliable. I also used to keep a box file of paper ideas and a folder full of photos or screen shots that I want to think about properly.

Once a year I spend a couple of days pulling around 12 business improvement projects together by wading through my random notes. I then implement these throughout the year. This means that I have separate times for ideas, deep thinking, and implementing my plans.

How do you capture your ideas until you’re ready do turn them into projects?

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How can tech help a small business?

With MTD on its way for sole traders and then limited companies it is essential to get everybody keeping digital records sooner rather than later. But, while MTD are wielding the big MTD stick, what are the benefits to small business owners of using modern cloud software for their bookkeeping?

  1. Multiple users can log in at the same time so accountants can help clients more proactively with queries or business issues
  2. Gone are the days of manually typing everything. Software can link to data entry apps to do your bookkeeping from a photograph or PDF thanks to OCR (Optical Character Recognition) or can link directly to electronic tills or online shops as well as automatically uploading your bank statements.
  3. Invoices can be raised from the app on a phone and card payments taken before leaving site. Saving Friday nights for relaxing rather than paperwork
  4. All this automation means that business owners can do some of the work themselves to reduce their bookkeeping bills.
  5. With remote access to the business numbers accountants can finally be more proactive
  6. Management information is available at the touch of a button. Of course, more complex businesses may need proper management accounts but even that is quicker with up to date bookkeeping.
  7. We run monthly bookkeeping health checks* for all our clients so that, even when they do it themselves, we can ensure that their record are up to date and in a good state each month.
  8. With up to date bookkeeping year end accounts can be produced much faster.
  9. Accounting software can be attached to hundreds of apps to help project management, staff scheduling, stock control, and all sorts of other parts of the business.
  10. It is easier to have regular contact between business owner, bookkeeper and accountant and to provide the best service possible.

*At Minerva Accountants we use Dext Precision, formerly Xavier, for most of our health check reports.

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What is business advisory?

As you know I’ve spent the last year writing ‘Changing the Numbers: how to deliver advisory services for success’ to help accountants to provide real help for their business clients. And I’m the first to agree that, whilst all businesses need this service, not everybody can afford to pay for it. (This is why we have free products such as our Better Business webinars for accountants and our Money Matter ones for general business.)

But for those clients that can afford to invest in growing their business then we can do much better than a bit of tax advice at the year end or help completing a loan application. As accountants we have financial training but we also have exposure to hundreds, if not thousands, of businesses as well as running our own.

Accountants who, like me, have worked as Finance Directors or similar will know that their role at the board room table includes much more than ‘just’ accountancy. The topics that I’ve identified include:

1. Vision and values
2. Cash flow
3. Pricing
4. Staffing
5. Efficiency of operation
6. Funding
7. Tax
8. Mergers and acquisitions
9. Marketing
10. Sales
11. Customer services and quality
12. Cost control

Different accountants may offer advice on some or all of these areas depending on knowledge and experience so we need to be clear on those areas.

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When should I recruit?

It’s a question I’m often asked.

You need to recruit BEFORE you get busy so that you have time to train your latest employee. Particularly if this is your first employee as all the training will be down to you. With my first employee, a trainee accountant, I was doing my own work in the evenings for the first two months.

You need to recruit early to allow your new person to get up to speed with the work, your clients, and your systems. Even with fully qualified accountants this took about three months.

You can accelerate both of these with a good induction programme. (I share ours on our courses)

You need to recruit early in case you find that you have chosen the wrong person. It’s something we all fear when recruiting but better to move them on quickly (and kindly) if they’re not a good fit so that you, and they, can find something better.

So, my rule of thumb is to recruit 5 months ahead of when I need the team member to be at full capacity. 3 weeks to advertise, 1 week to interview and decide, 1 month for them to give notice, and 3 months for them to get up to speed.

It’s much easier getting new business than new team members so, if you have the right person, you can soon find the extra work for them to do that will cover their costs.

What’s your experience of recruiting and onboarding new people?

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We don’t need another hero

I’m currently reading Building a Story Brand by Donald Miller which is about getting the right marketing message for our business. It’s very good and I recommend it.

Miller suggests that we make our customer/prospect the hero and that we are not a hero but their guide. As you can imagine it set off a train of thought as I reimagined my own business in this light.

How do you and your product/service guide your clients to solve their problems and reach their goal? Now, how can you build this into your marketing?

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