How I Built My Accounting Firm to $5M and What I’d Do Differently

The internet has completely changed what it looks like to run a profitable accounting firm. But professional services like thought leadership, it hasn't caught up. 95% of accounting firms run the exact same way today that they did before the internet. How is that?

Today, we have unlimited power, unlimited reach to find anyone out there with very specific, very expensive pains that we can solve for them. Whereas 20 years ago, you went to like a chamber meeting and you could serve anybody within, I don't know, a 50 mi radius. We now have the entire world open to us and that completely changes what it looks like to run an awesome accounting firm. This isn't hyperbole. This is the product of seeing what real accounting firms are are doing completely different.

Now, I've worked with probably over 2,000 accounting firms in the last couple of years. I last ran a 40 person firm myself. And today, I'm giving you the road map, a honestly dead simple ninstep plan to take any kind of firm, a legacy firm, a middling firm, an average firm, and turn it into something amazing, wildly profitable. But the the bigger thing for me as a former firm owner, something sustainable, something fun, something your team can get excited about. I'm going to walk you through this step by step.

But here's the thing is the way that this uh falls on its face is if you try to put this whole thing on your back. I'm talking to you firm owner. You know, those big ideas you got, all those grand ambitions, that stuff just doesn't happen as long as you pretend you're going to do it all yourself. So, the best way to go through this video, get the team involved. Welcome to the most uh productive, profitable 1hour staff meeting you will ever hold. And if you're a staff person, welcome. So, by the end of this, let's have a plan for how these things are going to get done. Who's going to take the lead headed out of here today and set a new path, a new trajectory for our firm? Let's do it.

If we haven't met yet, my name is Jason. I help accounts around the world run better accounting firms. The very first thing we need to do, it's not tech, it's not pricing, it's not it's not finding that unicorn staff, it is going through the client list. We are grading our clients. Let's do [Music] it.

All right. First things first, we are grading the client list because your firm will only ever be as good as profitable as the clients you have on that list. And not all clients are made the same. So, three criteria I'm going to grade my clients on. Number one is effective hourly rate. And I don't care if you are a skinny jean wearing avocado toast accountant that doesn't believe in tracking time as if as if time is just this construct that that old, you know, big four regional firm just made up. No, time is real. Time really does matter. And so the first criteria we're going to assess our client base on its effective hourly rate. And and this probably looks like exporting your client list out of your practice management system, getting to as accurate of a number as you can come up with with the data that you have. And I'll show you what this looks like for most firms.

All right, this is revenue. These are my different clients. We got a client who doesn't pay me very much money. A client in the middle, a client that's on like a bigger engagement. And the way our minds process this is we think big engagement, good often times big engagement, cool. But the fact that it's big doesn't necessarily mean that we're making more money on it. The goal in in serving your clients shouldn't be to do more. it should be to do better. And so what really matters here is not revenue, it's profitability. And this is where like the the volume of inputs, be it labor hours, that's going to be the bulk of it, or other costs. That's where this is really important because you may find looking at all these different clients. In fact, I I'll I'll show you what I learned when I did this exercise is this is like my cost structure. In my firm, we did a really large volume of stuff, but we still had a whole bunch of outliers. What I found was we kind of had this like cost base where the cheapest legacy projects made virtually nothing. Some of them even lost money, but then the bigger projects, they paid basically for everything else. This was the case with my tax practice. But with my bookkeeping practice, it was actually kind of the opposite. My little baby projects, I still made hardly like hardly any money. But the slope of this, I found that I actually made very little to no money on my big projects because I got gunshy when it came to pricing big engagements. Like I had sticker shock at how much money that would be. So I would underpric it. It'd be a huge amount of work and as as a result, like a bad project. Well, maybe the project wasn't bad. It may have actually been my fault. The client may have been willing to pay twice as much money. But that was just where I was at when I first did this exercise with my bookkeeping practice. So on my tax work, I could very clearly see, okay, we got a little bit of margin on these, a little more margin on these, and lots of margin on these. Right? Very obvious lesson here. Fewer of these, more of those. On my bookkeeping practice, the way I drew these lines are kind of all the same. But the information here is still valuable. We need to ultimately change something here. And in my case, I just got better at pricing the bigger, more ambitious engagements. I actually switched from um pricing things through the lens of what I thought bookkeeping cost to like full-time equivalent. So, I would go to the client, I'd be like, "You're going to have to hire like an a controller to do everything that we're going to do here for you." And maybe we're half a controller. Maybe we're one and a half of a controller, but here's the market price for that. Like, this is the alternative. And then we were able to price these engagements at like, you know, 3 to 10 grand a month. All that you should care about is this shaded area here. It doesn't matter. Like, revenue does not matter at all. This is a vanity metric. All we care about is how profitable are these projects? And the best proxy for that, while it's not a perfect number, is effective hourly rate.

Now, two other qualifiers for how I'm going to grade my clients. The second is which clients are my staff into? Like, who do they enjoy working with and who do they not? This can be as simple as sending the client list to your staff and asking them to identify who are the three favorite clients on that list and the least favorite clients on that list. Because you may have a project like this that's super profitable, but if a bunch of your staff come in and they're like, "Yeah, no, we hate this one. This guy sucks." Or maybe we hate this one because of something about the business. We need to know that. In fact, if you're an accounting firm owner, one of the leading sources of staff attrition is sucky clients. Is having to work with somebody that is just energy sucking for your team. Everybody always says like, "You don't quit the business, you quit your manager." That's true, but in accounting firms, you also quit your clients. If you got to work with people you don't enjoy every single day, that matters. And when you're trying to do the calculus of should I fire them or not, don't just think about the profitability and what this means for the business, think about this. This is way more important than this client because this guy, there's a whole bunch of other ones out there. This guy, good freaking luck in 2025 finding another one of those guys.

Okay, so first qualifier, effective hourly rate. Second, do your staff like them or not? And third, do you want to work with their friends? And this has taken us a little bit in the direction of specialization, which we're going to talk a bit about. If we learn that this is this is a beekeeper, and we've actually found a way to do beekeeping uh work really really profitably, not the actual keeping of the bees. I don't I don't know anything about that. But for one reason or another, we've stumbled into a a industry where they have great need for what we do. Maybe the the things that we're solving are really really painful and they have money to pay. So, we're in that like nice ven diagram of we're solving meaningful problems and they can pay us to solve those meaningful problems. If that's this client, then do I want to work with that client's friends? Absolutely. I want to kind of figure out where they hang out. What are the publications that they read? How do we find more of these?

So, that's step one. We got to go through the client list, all the people that we serve today. Because your client list in many ways it is like uh a a baseball team where you have a roster of clients and you can like invest in training them and trying to fix them and all these things and you can maybe make these little step improvements but by and large these clients they are who they are. But out there there's a whole big world of all sorts of different clients with different pains, different preferred ways of working from different industries. But if you have a bad roster, if you don't have the right people here, I would argue most firms today, we spend too much time trying to fix them. We have like a very small kind of simplified worldview that says, "Well, we can only ever work with these people." When there's 7 billion, how many people are there? There's a lot of people out there. And the firm owner, your most important job is to be the curator of the client list, kicking the people off that shouldn't be there, and working out how to find the next person who's an upgrade. We're going to talk more about that.

But let's get into the second thing we need to work on here is to challenge your pricing. And let's actually just stick with this example right here. Most firms are closer than you realize to being wildly more profitable. And I'll I'll let's pick on let's pick on this guy. This first client, see this little little witty itty bitty little shaving of profit that we get here. There's so many examples of these projects in accounting firms where, you know, say this is like a 10% margin project. We think about like, oh, how much will we increase our prices year-over-year? Well, inflation is this percent and what's really reasonable. The reality is most of us are vastly underpricing what we do. Oftentimes, even pricing less than, say, uh, Turboax live full service where federal only tax returns start at like 1,700 or 1,800 bucks or QuickBooks Live Bookkeeping, which starts at like, I don't know, 200 bucks or 300 bucks a month. A lot of us are pricing really close to these productized services that are just a much much lower level of service than what you deliver. And so an uncomfortable pricing change, it just it just needs to happen because we weren't set up in the right place. And to be clear, this is completely normal. This is growth. If all you're doing at the end of a year is increasing your prices, the amount of inflation, then what you're saying is me, myself, in the last 12 months, I'm no better than I was 12 months ago. And that just is not the case. Especially if you're here tuning into stuff like this, you're investing in yourself and in your firm. So ask yourself, have the capabilities of you and your firm evolved in the last 12 months or in the last 5 years if all you've been doing is inflation bumps? The answer is hyund man 100%. And so for most firms, like it's high time for a a bigger step change in pricing. And part of what makes it really hard is like it's an admission of what we were doing wrong. And we don't want to have to go to the client be like, "Sorry, we kind of bungled this." And so we keep doing these itty bitty things when sometimes you just got to rip the band-aid off. And it doesn't take much to make a really big difference. Because if this is a say 10% margin project, and this ought to go without saying, but I don't think we really think about this much. All it takes is say a 20% increase in price and we've taken a 10% margin project. Obviously now that's a 30% margin project, but that just 3xed the profit of that client. 3xed. You know how they say like uh double your prices and go home by lunch? In the case of this project, we could increase our prices by only 20%, and not go home by lunch, go home by like 11's or I 10:00.

And this I mean this logic applies for even meteor projects like this. Say this is a 60% margin project. The great thing about price increases, they go straight to the bottom line. as opposed to what we focus on instead, which is the less emotionally taxing stuff of like, oh, workflow and technology and all that. You get to the end of a busy season and your mind goes straight to not how do I find the next great client or I should probably get rid of these clients, but what technology changes should we make to uh increase our capacity. So, so let's just follow that through like the cost structure of your firm. If we're getting more work done, say 20%, great. We could maybe reduce the cost structure of the firm 20%. We could maybe do 20% more work, but we're not making any more money on that work. It's like a percent of a percent as opposed to I'm going to charge you one more dollar. That one more dollar is going to hit my bottom line. We don't give that enough attention.

And so we we undervalue things like the client experience. You know, like clients for them perception is reality. They don't understand any of the stuff that we do. All that they understand are the touch points. And if we run off and we work for something behind closed doors for a 100 hours and we have the biggest brains in the world working on it and then we send them an email, we say, "Here you go." We don't explain anything and help them feel involved in the process or or even worse have like kind of passive aggressive touch points. They're going to be like I they they have no value or like no understanding of the value of what you just delivered them. And the really sad thing is is as soon as we get busy and we start pushing up against capacity, the first thing to suffer is usually the client experience. you're slower to respond to those emails. You can get a little more grouchy like, "No, I don't have time to hop on that call right now even though I know you want to talk." And there's obviously like that can go too far and you have to have boundaries. But when like 60% of the game is just price and how next year could we justify a higher price that people will be over the moon to pay, then client experience, like there's kind of nothing else that's that big of a deal. This may look like investing in like dedicated client concieres, like a relationship manager, like a whole different level of caring for the client. A willingness to do like dumb manual things for them when it's something an admin can do. Because those parts of the process, they they make a difference for staff. As much as we want this to be like a meritocracy of who's just doing the best accounting or who's doing the best tax, that's not the way your clients perceive the experience. And as much as it grinds my gears, we have to invest in the perception even though it isn't reality. Even though it doesn't give them a bigger refund or a faster month end close. And it's because that perception like it all comes back to how can I justify charging another 20% next year that goes straight to my bottom line.

Okay, number three. Let's let's rip some band-aids off here. There's a lot of these things that we're going to go through honestly that are things you've probably always known. you just maybe haven't known how or haven't been willing to like execute on that change. And number three is a great example of this. Cut unnecessary service lines. There's a lot of things that accounting firms do for their clients that could be framed as like basically doing your client a favor, but you can't ultimately really make any money on it. And so when you're when you're thinking through stuff like this, I mean, you can look at like what does this look like for my tax work? What does this look like for my bookkeeping work? But then drill deeper. What does this look like for my payroll work, for doing personal property tax returns, for doing, I don't know, bill pay? Most accounting firms these days, they do so many different things. And it's often times because we try to win business on the breadth of our services. You can come here and you can get it all in one place. That's a that's a really hard business to run. Oftentimes, the better alternative is like find a partner, like find a payroll firm who can help you with that stuff. find, you know, maybe maybe a fractional CFO group that can take over some of that ongoing advisory lift if you don't have the team for it. Like there's nothing that's off limits here. But the more that you can do less, the better because we're capable of focusing on fewer things than we think we can. We we have grand ambitions to do all these things amazingly. The reality is you simply can't. And organizationally the focus of your team, your firm, it will follow the tasks. And if a huge percentage of the tasks are these menial recurring things, that's where the focus is going to stay. But honestly, what what keeps us from doing this is we feel like, well, if we don't do it for the client, how are they going to get it done? And so, a way to kind of walk this back is to consider three versions of a service. A done for you version, which is what you're doing right now. The client gives you everything. You just you just handle it for them. A done with you version and a do-it-yourself version. The first time I encountered this, honestly, was during COVID relief when it was like everybody wanted help with PPP loans, but we couldn't possibly help everybody. So, what we did instead was we put a bunch of investment into really good DIY resources and the rest if people wanted to pay for it, we would do it with them. So, let's take payroll for example. Let's say right now all payroll is done for you and that's it. The only way you help anybody with payroll is if you do the whole thing for them. Well, these days, like using Austo or Ripling or something like that, certainly not all that hard to run payroll. So, could we put together a guide to help them DIY it? Could we put together a different level of service support where like maybe we just go in and review it once a month or something like that? We may be hesitant to like give away our playbook, our really valuable process of how we do this work. But if that work ultimately isn't the best work for your firm, then giving that away, that's absolutely the right thing to do. Remember, we're incapable of focusing on as much as we think we can. So, we almost have to bias the other way. How do we simplify this down to where it probably seems like seems like we could have done more, but because we always overexpect, this is probably the more realistic path. I don't know about you, every morning when I get out of bed, I'm like, "Oh, here's all the things that I'm going to get done." And then I clock out at the end of the day and I'm like, "Did I get did I get any of those done? Like, what just happened?" The same thing happens on a daily basis for all of us. So, you better believe that organizationally over the course of a year, the same thing's going to happen. And if you truly want to be prolific at a specific thing, it's more about what you don't do than it is about what you do.

Okay. Number four, we got to systematize our firm. And there's a hundred different flavors of this. I'm going to show you what I think is the most practical way to take any firm and get it to a systematized place. Here we go. Here's the first exercise. To start with, I'm going to get everybody in my firm into a room and we're going to get a big old stack of post-it notes and we're going to write down the things that we do for our clients, all the different engagements. Cuz if you're like most firms, this is a big hot mess. It's a bunch of different things. So, let's do like uh two bookkeeping engagement examples and two tax engagement examples. So, here's a bookkeeping engagement that we do monthly. We deliver by the 20th of the month. It's done in QBO. Let's say as part of that we like enter all their bills cuz every single engagement has these weird maybe one-off things we do for them. And that's that's the important thing to capture here. What are those fiddly little things we do? Let's say a bi-weekly payroll. We do a simple IRA contributions after payuns and then we like call them when the financials are ready. It's like one of those things that somebody did once and the client likes and you're like, gosh darn it, I wish I never would have done that the first time. Now, the trouble is across a 100 different engagements, every single one of them ends up looking different. And so, you have this tangled mess of all these different things that you do for people. So, another very common uh example of a bookkeeping engagement. Let's say that this is quarterly. You deliver by the 15th of the month. This one's not in QBO. It's some other weird maybe industry specific ledger. Maybe this has uh some element of inventory like you're you I don't know, you reconcile to some report each month or something. I'm just making up like one-off things. And then maybe we do a weekly bill pay for them. Like we actually pay the bills. Same firm, two wildly different engagements. How do you standardize that? Well, a lot of firms, they're also doing tax because because everybody wants allin-one, right? Those skill sets, books, and tech that totally overlaps. That's why it's hard to run an accounting firm. So here's the tax engagement. Let's say this is a 1040. You do intake in office because that's the way it's been done for the last 17 years, which is a great rate, great reason to keep doing it that way, right? You get their $1099 from an investment advisor. You've got like a uh I don't know, the client signed the form and so they send that to you automatically. Great example of like a one-off thing that's different about a specific client. And then to deliver this one, uh you call. And right now, the way that most of these differences get tracked is like, well, that's been my client for a long time. I just remember what Jim prefers, but we haven't actually captured that anywhere. Let's do one more example, tax engagement, and then I'll show you like how do you bring all this stuff together into a framework. Okay, last one here is an 1120S. We got to clean up the books. It's in QuickBooks Desktop intake. We just we just do ourselves. Like the client expects us to hop in. Maybe that QuickBooks Desktop files in a hosted environment. And every Feb February, we just hop in, tell the client anything else we need, and then we deliver the return with a Loom video. Four different engagements all inside of one accounting firm. How in the world do you standardize this stuff? Well, this is step one. You get it all on a board. And so all of your team, like you think of all the weird different things you do for your clients. Maybe it requires like daisy chaining a couple post-it notes together to fit it all in. But you put that all on the board first. And then here's what I want to do is I think about the services that we deliver on kind of a four tier hierarchy. Packages, service levels, services, and service items. The next step after we've done our post-it note exercise is to identify what services we provide. And if I just look at this tax work here, well, obviously tax prep here. We got 1040s and 1120s's, but also cleanup books, like that's kind of its own thing. We do it for some clients. Maybe other clients have like a more mature internal accounting staff. So, we're not really doing that much cleanup, but we look at these post-it notes and we try to identify like what are standalone things that we ought to treat as services. And right here, what I would say is I see two services. I see tax prep and I see bookkeeping cleanup. Now within your services you will have service items which are kind of like variables within a service offering. So for example on tax prep I would have a service item that is you know form type or return type. And in this case we have a tax prep service that is the 1040 return type and the 1120S return type. Now how could we approach the same thing for bookkeeping? Assuming I have a bookkeeping service. What service items might belong to that bookkeeping service? Well, how about the ledger? Like what ledger they're on? QBO versus some other weird thing. How about expected delivery? 20th of the month, 15th of the month. Recurrence frequency, monthly, quarterly. Now, other services I see here, bill pay, that's got to be its own thing. We don't do bill pay for everyone we do bookkeeping for. Uh payroll, that's another type of service. And a service item within that service is probably like retirement management. That's simple IRA contribution. And so if I come back here, the first pass is to determine like what services does our firm offer, what service items belong to those services. And then for these post-it notes, we do another pass at the same thing. So for example, we now have a bit of like an internal vernacular for what this could be, right? So this is actually it's not a 1040, it's a tax prep service and the return type service item is 1040. Maybe the intake method service item is in office. Maybe the delivery method service item is a phone call. You see how this is kind of like starting to come together into a framework. Let me show you. We've made a humongous Google sheet breaking down services and service items like 19 different services and accounting firms and different service items. I'll show you uh bookkeeping as an example. Bunch of different service items here. frequency, platform, accounting method, report package, delivery method, close speed, what financial statements are included, and then a bunch of different options like what are the ones that we're willing to do for people. For example, platform, QBO, QBD, Zero, Excel, Intact. We've built this out for like 19 of the most common services for firms. You can swipe this. We'll put it down uh in the video description. But a funny thing happens when your firm has a vernacular for what you do for clients for the first time. is those projects. Now that we've agreed upon like what those variables are, those projects start trending to be more similar for the first time rather than their default, which is to trend more different. Because the next time we do a pass on these post-it notes, now once we've nailed down all the services that we do and the service items that define how we do them differently for clients, we've now captured like 80% of what makes these projects unique. Now, we're still going to have to have a catchall. So right here, uh, we get the $1099 from an adviser. Great. Now, like in our practice management system, the client specific to-do, it's just this. All of these things, everybody knows what they are. Like that's turnkey. That can be nailed down. This thing is different. Now, this is a bit of a simplification. If you go to like doing month- end closes for clients, you're probably going to be calling out more of those things that you do differently. And sometimes you'll do that same different thing for a bunch of clients. So, for example, maybe you're in their Slack and you talk every day over Slack. Well, that probably started as something that you did for one client, but may now be a core part of your service offering. And if that's the case, then maybe that's a service item within your bookkeeping service, communication method. Maybe the default is email, but the more premium option is Slack. It wasn't until I had like a framework for managing all of these services and the service items that belong to them. It wasn't until we had this that we ever had like a vernacular internally to describe what it is we do for clients. And if you do any of this, like I recommend start with the post-it note exercise and just get into services and service items, but I can tell you what that unlocks next is you will find that there are certain combinations of these things that you prefer where you're like, "Okay, if you're a dental clinic, we actually really want you to be doing this, this, this, and this." Let's say uh bookkeeping on QBO closing every month by the 20th of the month. Uh delivering a summary over a Loom video, like explaining that to the client each month on video. Maybe that's what you've seen work best. And so you're now a little more opinionated where you're like, I I think you want to do this. Well, that's where you get to service levels. If there's a combination of those service items that we like, we can say that's now say bookkeeping 2. Maybe bookkeeping 3 is like a more premium version of the same thing. Maybe bookkeeping one is a less frequent or more basic version of the same thing. Now, rather than all of this, which is a lot, like all of the service items, all the properties, rather than having to think of all that for every single client that you do, the next step is to have a simplified vernacular to say, well, here's what bookkeeping 2 is, here's what bill pay three is, what what payroll 2 is. And everybody knows what that means. And that may sound hard to like do things in that standardized of a way right now, but this is the path to that. And I could tell you as someone who ran a firm that did like 1,900 engagements a year, 80-year-old firm, you better believe it was a big old hot mess of doing all sorts of things differently because you had you had different partners, different people. A client would ask, "Can you do this thing for me?" And they'd be like, "Yeah, no, sure. We could probably do that." But as soon as you have this and you have like commonality across those engagements and your team understands, oh, we actually have a service item for that and our preferred way to do say simple IRA contributions is this or that, then when the client asks, you can be like, yeah, how about we do it this way? And usually the client doesn't actually care. What they propose to you is the only way they can imagine doing it. But if we have a preferred way to do it, most of the time they'll just get on board. Another problem you have with bigger firms is you have like different stakeholders that have stumbled into doing things their own way. And so there's Bill's way of doing it, Tina's way of doing it, and then everybody in the firm has like different preferences and that becomes a mess. This is a way to get like everybody agreed on a common framework that still has a lot of flexibility. And so the first time you put this together, it's still going to be a big hot mess, but you will have language for your big hot mess for the first time. Uh grab that service library I just showed you. It's down in the video uh description. Most of what accounting firms do can be slotted into that. And if you go through that with your team, it then becomes so much easier to build processes around your services because if before every single project looked unique, you can now identify the 50% of every project that's the same or the 80% of every project that's the same. Then when it comes to proposing services to clients, you can organize that stuff into packages. Your bronze, silver, gold. Everybody understands what that includes. And even when it comes to how you set up your team and your org chart, for most accounting firms, it's a whole bunch of people just doing different things and it's entirely reliant upon their expertise. They do the project from beginning to end and every single one is a little bit different. But if you're trying to get your firm to a more um sort of assemblyline approach, and this is how I did it in my firm, we started in pods where we had groups of people that were all kind of working on their own projects and they would help each other out. But when we got our services really nailed down and we had a clear language for how each project got done and the little differences to each one, then we could move to having functional teams where all they did was cranked on specific services. And because you now have this language, they understand the differences between each of those projects and they all get more similar over time because you start steering your clients to doing that work the same way. And when you have people on your team who all they are doing is cranking on that one specific service and then those pods, they actually end up being more uh kind of the reviewers or the client relationship managers. You get work out the door at a wildly different scale than you did when everybody kind of just did what they did cuz it's what they've always done. Super recommend you go deep on that systematization. So important.

But now we're getting to making the money, getting people to pay you more, finding clients who are frankly even happier than the clients you have today to pay you more money. And that's a common blocker anytime we're talking about pricing or anything like that. We're like, well, I don't want to I don't want to overcharge. This isn't actually worth that. When the reality is like, it's worth what it's worth to the client. And the reason people on your client list complain today is they think what they're paying is more than what it's worth to them. But there's clients out there you haven't found yet who will pay twice as much for what they perceive as more than twice the value. So it's like the whole relative how does the client perceive the value versus what do you charge? We're trying to find the clients who are like so afflicted with the problems that we solve that they will be over the moon to pay more than the clients that we have today. That like that is a form of serving a better client that I think everybody can get excited about. And number five here, it's actually a really juicy added benefit of this whole systematization thing we just went through, and that is cross-selling and upselling our clients. My biggest source of new revenue every single year was not new clients. It was new revenue from existing clients. Like the annual renewal season, we made hay because we did this. We looked at our different services and we considered like how do these services interact with each other? How can we identify cross-selling opportunities between different services? In a perfect world, your services and your service levels, they all have a natural progression that pulls the client in. So, you're doing more for them in a more premium way. And because we now have a vernacular for this, like a ladder for the things we do for our clients, then anyone in your firm can sell. It's not the big boss. You're not talking them into doing something new. You're designing a very logical progression that brings the client into more valuable work that you can command a better effective hourly rate for. So, how do you figure this out? Well, once you've got this stuff mapped out, look for the logical connections. And I I can give you the biggest ones that I ran into in my firm. We started doing bill pay for clients, but we found that a lot of those clients we had we did bill pay for, they had like concerns over cash. They weren't sure like what payroll was going to look like 2 weeks down the road. But when we had all the bills in one place, we were able to project out cash better than that client ever could have because they were kind of taking bills in and just like paying them ad hoc. We had a much more structured approach to accounts payable. And so we could project what the cash burn was going to look like. And it's funny, this actually led to us doing a ton of bill pay because while the bill pay I couldn't make all that much money on, I was okay doing it because it was easy to staff. It didn't require accounting expertise. But it really became a gateway drug to cash advisory, which clients paid really, really well for, ironically enough. They worry about having enough cash, but they're happy to pay for a service that will tell them if they do. And that service even we figured out how to staff in a way that also didn't require any accounting expertise, but we couldn't do the cash advisory if we weren't doing the bill pay. Other examples, if you're doing uh payroll for a client, more firms now are stepping into like benefit admin. So, uh helping with uh retirement contributions, the annual forms you got to get done for that. Even health, a growing number of platforms, uh you know, your gusto, rippling, stuff like that. They have a kind of an integrated benefit experience. This is something we did a bit in my firm where we actually went as far as being like a user in a client's Slack. The user was just called payroll and benefits. and uh employees could come to us and be like, "What's this thing on my payub? Where do I go to get this or that information about my benefits?" And we could staff that user and it took so much weight off of the business owner, off of their back office team who's like, "We don't know anything about this stuff. We'd rather not fuss with it." But that then became like a premium sort of benefit management service. That was a very logical progression from payroll. Similarly, if you do tax planning for clients, there's a version of more kind of long-term cash cash advisory that goes handinhand with tax planning because I mean the biggest place where folks bungle their their tax stuff is when they just are not setting that money aside or the numbers come in where they don't expect. Usually, a client comes to you and they've gotten burned in the past not knowing how much they're going to pay. Well, we start doing tax planning with them. Now, they know exactly what they need to pay, but they may not have the money to pay it. The very next thing is how do we do better management of cash on like a longer uh time horizon? Those things go hand in hand. Uh last example, a prerequisite to being able to do tax advisory really good is some sort of like bookkeeping cleanup, right? And uh let's say you are doing a bit of advisory and and advising that client each quarter. Well, a prerequisite to that really is being able to do a cleanup, make sure the books are looking good each quarter. But once you have clean books, it gets way easier to also do tax planning every quarter, right? So, if you're doing quarterly cleanup for a client, you're not doing the books yourself. You're just cleaning up what they're doing. That hands off really nicely to tax planning. So, for each of your services, map out the best ways to cross-ell new services so that every time you get to renewal season, you know exactly what you're going to recommend. And as long as you deliver on that client having a good experience throughout the year, in all likelihood, they will happily pull you more into your business. Because remember, all of this stuff is ultimately taking them away from their mission. Nobody goes into business to do a bunch of accounting or benefit admin or anything like this. And most small businesses, they don't have the money to hire a CFO or even a controller often times. And so they will happily pull you in fractionally if there's more that you can do for them.

Okay. Number six, and this goes handinhand with cross sales, is create a premium option. This goes into how we approach three tier proposals. And we alluded to this a bit with packages, but let me show the right way to do three- tier proposals in 2025, cuz it's probably different than what you've heard [Music] of. So, here's like the normal approach for three tier proposals. You've got your bronze, your silver, your gold. These are like three packages you're going to present to your clients and say, "These are the various flavors and and ways that we can help you." And what most firms do, and this is actually what most thought leadership right now in our space says you should do, is bronze should be this, silver should be this, and gold should be that. But isn't this just more? This is uh approaching three- tier proposals in terms of scope. And if gold is three times the price as bronze, but is three times the work, did I really make any progress here? You could argue that maybe you did because like me personally, I would rather do more for a smaller number of clients than run like a super high volume, low touch sort of firm. But there's I mean honestly like there's examples of low touch high volume firms that could be super profitable right now. But by and large like this isn't better. This is simply more. And so the real goal when we go from bronze to silver to gold really ought to be effective hourly rate. It has to be more otherwise this wasn't worth doing. And actually the like the biggest counterargument to people rolling out three- tier proposals to begin with is wait a minute don't I know best like I'm going to let the client select what we should be doing for them like once I have an understanding of their needs shouldn't they be deferring to me the expert and the answer is like kind of yeah what the client needs shouldn't come down to taste but what does come down to taste is the method of delivery is how you deliver that service because some people they will do as much of it themselves to save money. Others like they will pay just for access even if they never use it. And so instead of setting up our three tier proposals on the spectrum of scope, that is gold being more, what we're going to do instead is simply make gold the premium version of bronze. And I'll throw a whole bunch of examples up on screen here because where my mind immediately goes is how do I make this feel premium? It's a lot of stuff that frankly accounting firms we don't really think about. But when we look at other examples of buying experiences out in the wild, uh you're you're booking a flight on a plane. A first class ticket is like three to four times the cost, but they'll spend maybe half as much, 50% more on a first class passenger, like the cost to serve them compared to an economy passenger. But first class, like first class and business class, that is where the airlines make their money. You look at like a Starbucks, a hot chocolate versus a white hot chocolate like like with white chocolate. The cost to make that thing is not anymore the white alternative, but they will charge more for it. This stuff is all around us. And even if you are not wired this way, many of your clients are I mean entrepreneurs, they're usually like they want to feel important. They want to be at the front of the line. They want the premium path. There's a reason that people buy Mercedes instead of the Toyota Camry that you drive. Is the Toyota Camry going to drive just as many miles? Probably. It might actually drive more. So then why do people pay more? The reality is that they do. The real question is why do I not let them pay me more? And so here's the right way to roll out bronze, silver, gold is set the scope according to what you think they need. So have those conversations to determine like do they need payroll

help? Do they need bill pay help? Have all those conversations and nail down the scope. And then what you present to them in a three-tier proposal, it's the basic version of it. The very vanilla service delivery, then silver is the slightly better one. Gold is the best one, the more the like the exclusive version. And so that could come with like a faster support turnaround.

We should always have an expectation with our clients of how quickly they will hear back from us. Not only because like they'll they'll then know like what's the expectation? Is it 72 hours? Great. Then if you ask, wait 72 hours to hear back from me. But also so that we can change it, so that we can set that at a different level for different clients. It's a great example of something that folks will hardly ever use but will happily pay for access to. Another is like when I do three-tier proposals, I make it very clear there's only a small number of the premium options available, and that creates some like perceived scarcity where folks will then be like faster to buy and try to pounce on it so they don't miss out. And so another thing you can open up for gold folks is early access to renewals. Doesn't cost you a thing. The goal is like we're looking for things that are very little like incremental additional work, but folks who identify as the type of person who ought to have access to that, they will pay for it. So maybe that's also like, you know, a dedicated phone line. Maybe at bronze and silver folks have to schedule a call with your team, but at gold, they got a phone number that they can call and somebody will answer. All sorts of things you can do here from the level of expertise the client has access to. Maybe it's staff level. Maybe it's like a director level or or CPA or however you want to, however you want to package that.

If you haven't done this before, good news. Everybody you got right now is on the bronze plan. And the funny thing that you'll learn, and I've talked to a ton of firms who have done this, is nobody likes, well, some people like, but most people, especially entrepreneurs, don't like to be on the bottom option. So simply by sending them a three-tier proposal saying, "Hey, you've got some more premium options here." Universally, the folks I talk to are surprised how many firms will opt into the higher service levels. And it is like just like that. It is an overnight boost to the bottom line. And if we if we zoom out, like it's worth remembering profitability solves everything. Capacity problems, hiring problems, overwork, this is all solved by having more profitable projects. If the next client we can find will pay another 30% and you're running a 30% margin firm, that project is twice as profitable. Now you can cut two legacy projects, spend half the time serving that new client. That's the goal. Rethinking how you approach three-tier proposals makes a big difference. Three more to go.

Number seven here, this may literally be like the most important one for you because our happy place is process and getting work done. But we do it like in secret. The only people that ever find out about how good we are are the clients that we already serve. So, how do we go out and attract folks who will pay us more instead of just hiding it under a bushel basket until the end of time? Number seven here, what we need to do is you need to create your first offer. Your offer is something that we stand up a service that we say that we'll do for people that solves a specific pain for the type of client you want to work with next. And so, part of this requires, well, who do I even want to work with next? Um, the normal filters for firms, do they have money and will they give it to me? That's not enough. You are enough in demand where we can set that bar higher. But a great place to start here is to look at your A clients. Who are those clients where you had the highest effective hourly rate? Understand who they are? What problems you're solving for them? Because where there's one of those clients, there's a thousand more. And so think about what were some very specific to that person pains that we could have stood up an offer around. And we need to try to think past bookkeeping and tax because while you could stand up an offer that's like total tax audit, make sure you haven't paid more than you should, so can anybody else like so can any other firm. And so if possible, we want to put this through the lens of a very specific type of business in order to illustrate our expertise within that domain. So for example, let's say I work with dentists because that seems to be the niche of 50% of accounting firms. What if I I like audit their back office sort of tech stack and their pro their procedures and all that and we look at how many touch points say the dentist has and having to sign checks and all all these different things. We know how to build a back office tech stack. Like I'm I'm talking around like finance stuff like that, not around patient management. But we can help them manage that back office payroll benefits, bill pay, all that. But then you can put it in terms of real dollars. Like what are the touch points dentists in that clinic have right now getting involved in that work? Can we remove them from it? Because we can put a very real dollar amount to hours of that person's time. So we think through like what this deliverable looks like. We stand up a landing page for it. So, if it's myfirm.com, this is myfirmbackoff boot camp. I don't know, something something cheesy, something trying to sound fun, but it should be like something brutal. And and as a firm owner, like if I'm standing up an offer for firm owners, what are the most brutal things? Um, you know, total tech stack breakdown. Like, we always have this tech stack dysmorphia where we look at everybody else and the tech that they're using, we're like, are we missing out on something? And so if there was a a way somebody could go through a process and know that they were on the right tech stack or exactly what to use, that's really juicy, right? Or maybe somebody could go through and review your client list for you to have like a second set of eyes on that to be like, here's the ones that are ridiculous and here's your A clients that you ought to double down around. Here's an example offer. Here's some example cross-sales. At this point, you're like, yeah, like that sounds great. Jason's given me so many chores to do here. If someone could do that for me, that'd be awesome. That's an example of an offer that would be really juicy for you. What we want to find is a great offer for our next A client. And rebuilding a firm is as simple as that. It's it's as simple as thinking about how do I attract the next A client one by one. It's not this big dramatic niching down and throwing out the kitchen sink and rebranding everything. It is literally just one client at a time. And if you get to a point where you should change your firm name to bad mitten CPA, you've only done that because you can see this work is way more profitable and we think we can go out and get a ton more. But it doesn't it doesn't start there.

So all the all these stoppers we have that make us afraid to niche down, stuff like what if the industry goes under. Well, in the process of niching down, most of the time you find a whole bunch of other adjacent opportunities that you wouldn't have known existed had you not gone there. In fact, a great concept from a book called The Win Without Pitching Manifesto. Basically, you're standing in a room full of doors and you can see all the options you have right now. But what you don't realize is that when you pick a door and you commit to walking through it, you're in another room full of doors. And so, if you're afraid of a niche going under, if that happens, well, you've got an entire network of people now that you didn't have before. But also, there's a whole bunch of other types of companies that serve that niche you were just serving. How about we go serve them? And because the only people aware of those other adjacent things are the people within that space, that's actually a much more interesting niche than you would have discovered otherwise. Going deep helps you to find more complexity, more nuance, and those are more valuable problems to solve. Usually, other blockers to niching down, uh, I don't have that expertise. I don't know anything about that stuff. I can tell you in most industries, those clients are served by generalist accounting firms. And so what you're competing against is not being some like big brain expert in the space. You're competing with the next accountant down the road who's a generalist who will happily take that client in and be like, "Oh yeah, we'll figure it out because your work is just like any other business's work." And so you're like a couple podcasts, maybe go into a trade show away from being the expert. And once you are, it's your job.

And this number eight, to be visible. We we are not marketers, right? Like none of us get excited about marketing. But what our goal ought to be is to simply be the most visible uh bookkeeper or tax pro, whatever it is within a specific space, within a domain. Maybe that's professional badminton players or beekeepers or whatever it is. The more general you go, the harder this will be. If if you're going real estate, great. Now you're competing against everybody else. If you're going dentistry, I mean, there's a lot of huge dental firms out there. Find something specific. This is what the internet really enables is specificity. Most accounting firm owners will say that their favorite part of running an accounting firm is sitting down with clients and being the adviser and being able to help them from A to B. All marketing is is doing that stuff in a way that other people can see. Because if we only ever do it behind closed doors, when we've got social media platforms and YouTube and all these different ways, podcasts, newsletters, all these different ways that people could instead see that expertise, we are like underleveraging our expertise so much. If the only people that ever see it are the people that are on the client list. In fact, here's what most firms get wrong. All of these people, they're your clients. And the only way you ever find a new client is when one of these clients comes out to their friends, they tell them about you and they become a client. The problem is, if we go back to like that visualization at the beginning of the video where you got some clients that are super profitable, many clients that are not. I don't necessarily want referrals from all of my clients. I do want referrals from A clients, from great clients, but I can tell you in my experience, if all I rely on are referrals, I usually get more referrals from C and D clients than I do A and B clients. And that's because there's just more C and D clients than A and B clients, but also because C and D clients oftentimes know they're getting a heck of a deal. And because they're getting a deal, they will refer their friends who then come in expecting the same deal. Yeah.

Now, for most of us, like we take really good care of these people, but we never think of anybody else. But what I would challenge you to do is to expand this circle a bit. What would it look like to serve more than just say your clients who are with you for like recurring services? Now, this could be a newsletter. This could be a social media post. This could be like going and speaking at conferences. But somehow we have to get people here so that they can then get there. And I I hesitate to even say the M-word marketing because as soon as I do, like accountants break out in hives. But if I can give you one bit of advice here, the the most important KPI here for any marketing efforts you do, whether it's being a guest on a podcast or or going to a trade show or something like that, the biggest KPI for you here is building your email list. This doesn't even necessarily mean that you need to write a newsletter, but having someone's email gives you the opportunity to remind them that you exist. So, if I'm going to go speak at a trade show, for example, I could uh knock them off their socks. I could give this amazing talk and I walk off stage and maybe somebody gives me their business card on the way out, but by and large, like that's it. The vast majority of those people will never think about you again. Maybe maybe it leads to a couple conversations and people maybe circle back around because they saw you that one time give that talk. But the way higher ROI version of that talk is the one where you're like, I share stuff like this every single month. Scan this QR code. I'll add you to my my email list of beekeeping professionals. Like make it specific. Make it useful. That is so much better than just walking off stage. And if you've done stuff like this, like gone on podcasts or or done various marketing-y kind of things and it doesn't feel like it was really worthwhile, often times it's because we don't have a call to action to actually have a a next step. Like, how could they hear from me again in a couple of weeks' time so that they remember that I exist. We totally get in our own ways here because we don't want to self-promote. We don't want to talk about ourselves. But if you don't, who will? And like at the risk of sounding too dramatic here, if you're going to commit your life to doing something and if you truly believe that you are helping people, I would argue you have a duty to put yourself out there to tell people about it. We can't go through life uh doing amazing things, helping people, creating these transformations, but then be so insecure in ourselves to not be willing to go out there and be visible in a way that will help people discover what it is that you're doing. Otherwise, what's the point of the whole thing?

Now, the devil's in the details. There's really crappy ways of doing that. There's awesome ways of doing that, right? I'm going to throw something up on screen here. This is a whole bunch of ways that you can be visible that don't require a marketing degree. It is like go be helpful to a consultant. Create a useful thing. There's a lot here. So, I'll I'll actually link this down in the video description as well. But when the thing that you enjoy most is helping people, all I'm telling you to do here is help people in a more visible way. Help people in public. And please don't be I can't give tax advice this or that. Like, yes, there's versions of this that go too far. But good marketing is just being helpful at scale. And we live in an age where there have never been bigger rewards than there are today for people simply being willing to be helpful.

Now, number nine is the only way that this is actually going to happen. And if you brought your team in on this, they need to hear this, too. Number nine, arguably most important, you have to protect your time. I mean, everything that we've talked about this today, none of this happens if you don't have the time to do it, right? And if I can go back to the the analogy from earlier, I roll out of bed, I make a list of the things I want to do, I get to the end of the day and I got nothing like half of them done. Maybe we got to recognize that like our brains are not capable of foreseeing all the things that we need to do and accurately measuring that. And so whatever jobs you are maybe ready to fire yourself from today versus the ones you're going to try to cling to, just know you will chronically underestimate what you're capable of getting done. And it's why like my motto in my firm as I went from doing all the client work to being totally out of client work, I eventually got to the point where I was like, I have to fire myself from every job and trust that on the other side of that, there will still be plenty to do. And wouldn't you know it, there was. But also, like, imagine a world where you actually did fire yourself from a bunch of jobs and you had a little bit of time. Like you could actually take a break or something. Are we almost like we don't even give ourselves permission to do that. But I mean a lot of us are like, well, I'm the technician. I'm used to doing the work. I don't want to move to working on the firm instead of in the firm. But at the same time you're like, well, I want to do all these other things that I don't have time to do. Getting there requires assigning a completely different value to your own time. And I mean in the in the bigger picture of our careers, we start out trading our time for money, right? Like all it is about is like how can I get a higher hourly rate for my time, whether I'm working at McDonald's or whether I'm doing hourly billing inside of my accounting firm. And if you reach success, whatever that means, if you get there, you have to like one day stop selling your time for money and instead start buying time. Otherwise, what was the point? If we go through our whole work careers like always being that penny-pinching accountant and never being willing to flip the script once we are like in a place that's comfortable to instead buy our time back by hiring a a higher-level person or that service that will take that work off of your plate. If we're never willing to get that time back, to me like then I don't know what the point of it all was. Like, there's financial freedom and most people that run firms, like you're beyond the threshold of what will make you more happy. The more interesting thing to me is freedom of time. Because if I traded my job in working for somebody else for a job working for myself where I look at my calendar and it's like, "Oh no, I actually have way more obligations now. I got to be accountable to all these staff and all that." That like the version of you that was working for the other person, they would see that and be like, "Oh, that's what independence looks like." That kind of sucks. You have to be willing to pay to then get that time back.

And the benefits of doing so. While it's harder to measure the ROI, you're now working on these bigger like higher leverage things, being visible, systematizing, building the machine, functional teams within your firm that you can pull like hire people into. They'll start cranking out the bookkeeping like all these little moments inside this video where you got excited. Imagine being able to build that stuff. Doesn't that sound great? Doesn't that sound better than going back to your inbox right now and having that passive-aggressive email from a client and being like, "This is going to take me 40 minutes." I could tell you which one of those things I'd rather work on. Let me give you a few like very practical tips here. Number one, be very mindful of what is low-leverage work. That is you working one-on-one with a client. While it's valuable, it's the lowest leverage thing that you can do, especially if you have a team and you can pull other people in because that task for you that's that's low leverage right now, it's an opportunity for someone else for a member of your team to get pulled into that work. Number two, recognize that the easiest thing for you to do is the same things you've always done. You want to know how many years I spent working 80, 90 hour weeks to prove to myself I was doing the best that I could? Running into the same wall for the 10th time in a row. That's the easy thing to do. Don't fool yourself into thinking it isn't. Number three, let the team help you. I mean, if you're like me, you're the ideas guy, the ideas person, and and you're coming out of this probably juiced on a bunch of cool stuff that you want to do. The reality is it won't happen if it's just you. Uh, I'm the same way where I my default is to put everything on my back because that's what I'm supposed to. I'm the boss, right? When we do that, we hamstring our team. You have very capable people around you who will only grow if you give them the opportunity to grow. Pull them in on the process. Number four, very practically, how I got out of client work. Every single client on my client list needed to have an account manager that was not me. And if anything came in regarding that client, it goes to the account manager first. And then I can help that member of my team behind the scenes if they need it. But until every single client in your firm has a home that is not you, then you're still designing a system where that stuff will will come to you, right? Number five, think about the tools, the technical domains that your firm deals with a lot. Maybe even the services. Actually, all of these things need an owner inside of your firm that is not you. And so, at the end of the day then, as I've created these filters, the only stuff that comes to me is one of two things. It's either something I've been the hero on in the past. So, the easier thing for the team to do was to come to me to get me to be the hero on again, right? And and often times we can swoop in because it feels good. But all you're doing is reinforcing the behavior that next time this happens, they're just going to come right back to you. Or two, if that thing comes to you, it's a signal that that software, that client, that technical area, it doesn't yet have an owner. And maybe that owner is uh on your team already, and it's just a matter of uh giving them the confidence and setting them up to be able to do that. Maybe it's somebody that you don't have on the team yet. But I promise you, by systematically eliminating the jobs that you have today, so many of these things that we've talked about, which are higher value things for you to move to, uh you you're still going to have plenty to do. That is just entrepreneurship in a nutshell, I think. And I can tell you myself, those next things were so much more satisfying and exactly what my team needed. My team didn't need me to do one more tax return, one more month-end close. Right?

I hope this was helpful for you. Uh, my approach to thought leadership and what I do here is I give everything away. Anything that I know, all education, it it is free. I put it out here. People ask me if I want to do consulting. I'm like, "No, like I'll point you to the video or the podcast or whatever I think will help you get over your problem." I give all of it away. But the only reason I can make any of this content, bless the the souls that have to edit this video, is the online community that I run for accounting firm owners. Because I I firmly believe the best hack to yourself become a uh better firm owner than you are today is to surround yourself with people who are on the same journey, learning and figuring out the same things. In fact, look at the view count on this video. There are so many people geeking on the same things as you right now thinking, "How am I going to do this? How am I going to do that? I have this kind of internal monologue that's blocking me." There are so many people going through that right now that honestly, I think the most valuable thing that I can offer you is connection with those other individuals. I can tell you is the most powerful thing for me when I ran my firm, much bigger than thought leadership or anything like that, was making friends that did this stuff. And I wanted friends that were like on a similar place to the journey to me. But I also wanted people who were uh behind me on the journey that I could help. I got a lot of fulfillment from that as well as people that were ahead of me on the journey. You look at like pricing a a bookkeeping engagement at $700 a month instead of $200 a month. That's unthinkable for me. If I go spend a bunch of time with people that charge $1,000 a month for it, it's just a matter of time before that becomes normal for me. Same thing with tax planning. So many people in the community that'll charge, you know, $10 grand for a tax plan. If I'm charging $500 bucks right now, I'm like, I don't believe you. And like, I can't imagine how I could get there and how it would become normal for me. The solution, spending time with those people. You go to breakfast with those people every Monday morning, in like 2 months' time, that's going to be normal for you. And it's probably a bad example because I don't do breakfast like that. But all that is to say, if you want me to connect you in that firm with over 500 other firm owners that are doing the exact same stuff, make a bunch of friends, get help along the way. Community is called Realize. Link that down in the video description. Thanks for being here. Obviously, this was a big boy to produce. And you notice what we didn't talk about in this video, tech, because I kind of think it's it's like a distraction. It's kind of like playing house. The reality is you got to nail your tech. Otherwise, you'll perpetually be looking over your shoulder at like, is there something better? And if you really need something more to do right now, let me point you to my video that will give you a beginning-to-end approach to build your tech stack from scratch, to like never have to think again, am I on the right stack or not? and to put those fears behind you once and for all. See you in the next one.