Allow me to walk you through the 8 ways to SCALE your bookkeeping practice – not just grow, but truly scale.
By the end of this read, I am going to wrap up with a free course for you, so you can take action step by step in order to increase your revenue, reduce your costs, increase your profit, and all those wonderful things that lead to a thriving practice.
So, the 8 ways to scale your bookkeeping practice are:
find new clients,
improve conversion rates,
improve client retention times,
increase prices and review/improve your pricing systems,
reduce cost of sales,
reduce your operating costs,
sell succession products, and
sell intellectual properties
These are the 8 ways to scale your practice, which I have created for you. Before we discuss each one, let's just touch on scale versus grow.
GROWING is more about growing revenue, which is not scaling. SCALING is about growing your PROFIT and your TIME – it's increase in gross profit, net profit, and also in time wealth.
Growing solely your revenue does not guarantee growing your gross profit or your net profit.
Here's an example where growing doesn't lead to additional profit:
(this one's just going to be of a client of mine outside the bookkeeping world, which is important because scale versus growth is so relevant to every single client you serve)
So, I was working with a client once, and let's call him John for privacy. He was making about $4 million in revenue, and his focus was on constantly increasing revenue because he thought it would fix the problems in his business. But, he had various problems in his business. So some things were going right, and some things were going drastically wrong. And what it was leading to was he was not making any profit.
The more sales he made did not translate into any profit – he was actually losing money.
So within about six months, I had facilitated and helped him by offering him succession services (number 7 on the list), which primarily was investigating the numbers, and some strategy and coaching through our Better in Business Academy.
From $4 million in turnover, zero profit, or actually losing money, to over a six-month period – I helped him get to about 80 grand a month profit, which he sustained most of to this day. And in fact, back in 2015 when I decided to use these 8 ways – particularly number 4, pricing systems – I was able to double my net profits without really impacting my revenue over a period of 12 months. I simply went from hourly billing to outcome-based fixed price billing.
So in order to SCALE your business, in order to build a THRIVING practice, you don't always have to focus on revenue.
It is one piece of the puzzle. It is not the holy grail.
Now, the next thing I want to tell you is just how you're going to take action before we dive into one of the 8 ways at a time. I have created the free course for you, and I absolutely want you to jump on and use that, but I do also need you to use my book.
The 8 Ways to Scale are made so that you can use them forever. I have. I do. And they actually do relate to other businesses as well! That's going to be great in terms of your acumen and what you can take to clients, particularly in your succession services.
But those 8 ways, they can be used very, very separately. Choose your own adventure, I like to call it. So you can look at them, and wherever you are in business now, if you've been a bookkeeper in practice for five minutes, five years, 15 years, you can pick and choose from these 8 ways in order to do better in your practice.
My book on the other hand, while you can use each one separately to some extent, it's a secret sauce recipe because it works best when all the ingredients are combined. And as we cover off the eight ways today, along with the course, my book will also help you. So the two combined are going to work the best.
Now, because I cover a lot of this off in the course, I'm not going to rinse and repeat everything. Today, I'm going to pick out things to tell you about each category that I think are really impactful. Starting with...
1. Finding new clients
So in terms of finding new clients, you can listen to my podcast and check out my book for chapters on that but right now, what I really want you to think about is around my top tip:
What are you going to do once you do find that new client?
That is the main thing I want you to think about right now. And you might be thinking, "But I want you to tell me exactly how I find new clients." That's covered off in the course. Heaps of my other podcast deal with that. My book deals with that.
The thing is, I see bookkeepers all the time that are saying, "I need to find new clients." when the truth is, they have actually found clients before. So why don't they have a thriving practice yet? And the reason is often linked to the fact that they don't really know what to do with that new client when they get them.
I meet a lot of bookkeepers who complain about cost focused clients who watch the clock and don't value them. When you meet a prospective client, you need to have a way to get them outcome focused from the get-go, a way to retain them as a forever client without price as a priority. If you are just going to go out and find new clients and you haven't got that nailed, it's not going to be fun, and it's not going to lead to a thriving practice.
So it's not just about finding a new client – it's about finding a new client and turning them into a raving fan; a delighted client who will stay with you for the life of their business.
The takeaway here is that I really want you to think about the fact that it's not all about finding new clients. I want you to reflect and really think about the fact that it is really, really important to understand what you are going to do when you get that new client. You're not going to sell an hour, you're going to SELL AN OUTCOME. You're going to have the marketing X factor nailed, you're going to have a whole lot of stuff in place, but, I cannot hammer home this concept enough of setting yourself up to treat that new client like a seed that you plant in fertile ground, and nurture to a brilliant oak tree.
2. Improving conversion rates
Number two on the list is improving conversion rates. I know that's a salesy language, all right? But this is about converting more prospective clients into actual clients, which is about having a way to help them SELF-ASSESS the need to use you and to choose you over your competitors without price as a priority. Sounds pretty cool, right?
In terms of converting more clients, the main thing that I want you to get right now is that you need to have a process in place. So by process, I don't mean that you go from doing the needs analysis, and then you give your list of services with a price attached – that is not a conversion process. That is a way to set your client up to be cost focused, and choose someone that's a dollar cheaper.
What you need to improve your conversion rates is a process, and that process is going to outline your profile, your reputation, and your MENU – which highlights your customer journey, your client's problems, and the payoffs and the outcomes, and any guarantees you offer. How you do it, you can dive deeper into in the book.
3. Improving client retention
So absolutely when you bring on a client, you need to aim for the forever client. And the forever client is the client that stays with you for the life of their business. What I see with bookkeepers is them struggling with retention, or they think good retention is having the client for six months, or a year, or two years.
But if that client leaves after a year or two years, why are they leaving? Was somebody else cheaper? Were they unhappy with your service for whatever reason?
Aiming for the forever client is about having a deep understanding of what your clients want. Sell the outcome, not the hour.
The key concept here I'd like you to grasp is actually the marketing X factor, and the marketing X factor is TRUST. And trust looks like: I'll do what I said I'd do in the timeframe I said I'd do it. You need to have a zero tolerance policy about trust. Your client engagement is your promise. So you do a client engagement that outlines exactly what you're going to deliver in the timeframes you're going to deliver it, and then that is your promise. You need to work your bum off to keep that promise, and not to make excuses as to why you weren't on time or why you didn't send that report that you said you'd send, but to actually just do it.
But if you do drop the ball, or even if the client has a perception that you drop the ball (because that happens as well), then explain yourself and investigate what happened. But ultimately, try to never let it happen in the first place. But occasionally, if and when the ball gets dropped, don't glaze over it. If the client says, "It's okay," they're lying to you, it's not okay, all right? Don't let it be okay. Explain yourself. Explain how you're going to make sure it never happens again.
4. Increasing price and reviewing your pricing system
This is where I'll say again, "Sell an outcome not an hour." We want to SELL AN OUTCOME. If you are still billing by the hour, you need to stop and you need to move to outcome based billing. I have a separate podcast on pricing to help you, so I suggest you have a listen to that.
Your outcome based billing is your pricing strategy, or your pricing system. In terms of price increases, my top tip there is like Nike says, "Just do it." You need to be increasing your pricing year-on-year. We do ours around new financial year, even if it's only a small percentage. And if you don't want to do that because of limiting beliefs and you are scared of losing clients, I would suggest the problem is bigger.
If you're scared of losing clients over increasing their fee commiserate with inflation, and it only tends to equate to a few dollars here and there, then it sounds like you're worried you've got cost focused clients. So are you outcome billing? Are you making sure that they're focused on value? Lots of other things that you can really get more into in my book, covered off a bit in the course, but use the two resources together, please.
5. Reducing cost of sales
Some years ago, I decided to really narrowly focus on cost of sales. I decided I was going to improve my cost of sales. I thought if the industry standard is X, I want to get to higher. So I went about all the different things that I could do to decrease my cost of sales and increase my gross profit.
One of the big ones was SUCCESSION SERVICES, but it was also amazing technology, turnkey systems, and the right people in the right jobs.
If I really do a forensics on our cost of sales, succession services is massive, but the other players there are the tech, the systems, and the right people, right jobs. With regards to those, I would direct you to the last two chapters of my book on systems and team. Lean into being a great leader and a manager, because it makes the world of difference.
6. Reducing your operating costs
The key takeaway here is to INVESTIGATE your own numbers. So when you read about succession services in my book, you'll discover all the benefit of them to the clients. But what about the benefit to you?
Your clients should be sitting down and paying attention to their numbers on a monthly basis, and I hope you are too. And all you need to do is pay attention to your numbers, your revenue, your revenue trends, your gross profit, your cost of sales, your operating costs that we're talking about right now, and you will make decisions that will incrementally reduce your operating costs, just like I always have.
7. Selling succession products
I like to say products because I sell outcomes – I don't sell time, I don't sell an hour. And when you move from selling time to an outcome, you are PRODUCTIZING what you're selling. We can also say we're going to sell a bundle of services, and when we bundle it up, it's a product, because we give it a name. So when you give a range of services a name, we've productized our service.
So, succession products: succession means "what's next?, what's NEXT on the menu for your VIP clients. This is not just about solving problems for prospective clients. When someone first comes to see you, you will generally sell them the bookkeeping or the catch-up bookkeeping. Once they become a wonderful VIP, it doesn't stop there. Go beyond numbers 101 in order to solve more problems.
Now, the easiest one is investigating the numbers.
Because when you move from just numbers 101 to anything else where you solve bigger and more problems, the outcomes are amazing, and the value which you deliver becomes even more amazing.
In terms of your numbers 101 services, they tend to be capped at what the market will bear. We are all kind of in the same competitive space. You can't go to market significantly more expensive and win business for a particular narrow service.
But, in terms of these succession products that you sell, whether that's investigating the numbers, software setups and training, whether that's recruitment, cash flow forecasting, whatever's in your suite that you are comfortable with delivering – what you can charge for that, well, you're in another space, you're in another market. I've got a whole chapter on that in my book, and it's in the course as well.
8. Selling intellectual property
This last one is completely linked to succession, because to sell intellectual property by nature is a succession product. I recommend that you read the Succession chapter in my book as this is a big subject.
So there's something I heard, which is so true, and it's this idea that something can be simple but not easy. Selling intellectual property, it is actually a really simple subject. It doesn't mean it's easy. The hardest part about it as a bookkeeper and bundling intellectual property into your products is actually the ideology shift.
I think it was a couple of years ago when I started my journey of creating intellectual property, to BUNDLE IN with the other things that I was selling in succession. And now, I have an online academy: the Better in Business Academy, which is available to bookkeepers primarily through my program. (That's where I show you how you can become an affiliate and use it.)
The point here is, what I did is through succession – I was delivering some productised services, but I was also doing some nice workshops which were really, really high value. What I did is I took those workshops, and I turned them into really great ONLINE COURSES. And what I found is, firstly, I could deliver so much value in a course because I wasn't restrained by time, and secondly, I was able to pack all this great information in there and give them intellectual property that I wasn't going to just deliver once, but they could watch, read, listen, do it as much as they wanted to.
And then because I was bundling it in with my services, I could make it a part of what I was delivering. I could say, "Okay, for this particular succession service or product, you're going to get these online courses as well as the time with me."
The value skyrocketed, and the feedback from the clients was great.
What they were prepared to pay for the bundle of services in that package that included my intellectual property was much, much higher, because they were getting so much more. Where I would previously have been trying to get through a workshop with them within one, two or three hours, and then we had to try and catch up again, they were able to do all of this stuff online and then catch up with me. So the ideology shift around this is the hardest part, but the journey of a 1,000 miles starts with a single step, and that is the key takeaway for selling intellectual property.