Arthur Ashe once said, “Start where you are. Use what you have. Do what you can.” Some of you may have been in practice for well over 30 years, while others may just be starting out. No matter what stage of your career you are in, this article will outline my philosophy of becoming a future-focused, advisory-centric firm.
Let’s face it, gone are the days of being able to pump out simple 1040 returns and make a good profit. For those of you working with business clients, what does that relationship look like? Are you proactively providing clients advice based on laws, changes, or information that could impact them? How many of your clients are 100% tax efficient? How many of your clients are 80% tax efficient? What will make your firm stand out versus the CPA three buildings down?
In a survey by Guidant Financial, the five most common COVID impacts are loss of revenue, reduced budget, temporary closure, cut own wages, and a temporary pivot of some kind to survive. When the shutdowns began, were your clients approaching you for advice, or were you approaching them? I’m not a tax or accounting professional, but I have owned a slew of small businesses in the landscaping arena. If I ever had a financial question come up, I knew my CPA would be the one to turn to. Rent v. buy, business entity structure, budgeting, paying employees, tax law changes in the federal and state arenas, and the list goes on. All of these common quick questions you receive from clients that are a 5-10 minute answer for you, provide unmatched value that most firms are not billing for.
So, you’re in the same boat as your colleagues? Overworked, underpaid, and giving away more advice than you’d like to. I’m here to tell you, start with what you have. Whether this be just yourself or if you have ten other professionals working alongside you, start here. You have the knowledge, expertise, and resources available to become the advisory-centric firm you have always wanted to be. Leverage your tech stack to empower your employees to deliver value to your clients. I’m sure your tax software can data mine a specific target client (eg. schedule c, 1120, 1065 that you also complete their 1040). Using your planning software, you can visually show the client impacts and scenarios based on their actions moving forward. But, where most firms fall short is capturing this value-add in their fixed fee or hourly billing model. Switch things up, stop structuring your client relationships around a deliverable of a tax return. Charge your clients and upfront advisory fee and then a maintenance fee to do the deliverables.
After you have a good flow on internal communication and process, set this new way of working with both new and existing clients. If a current client turns down your fee, get rid of them, they don’t value you, your time, or the value you are adding to their business. The key to the scaling phase is being comfortable with being uncomfortable. If clients are eating up your new package, raise the price for future engagements. If you are losing business left and right, your packages may be too high.
My point is, start, structure, and scale your practice into a future-focused firm ready for the continued changes in the market. Capture lost revenue that is slipping through your engagements. Capitalize on your current relationships and structure the new ones to be beneficial to your firm and your clients. What’s your excuse to not start today?
“Start where you are. Use what you have. Do what you can.” – Arthur Ashe