Due to circumstances largely out of the control of accountants and bookkeepers, traditional tax and compliance work is being commoditized and profits squeezed by fierce competition and technological advancements. This should come as a surprise to no one who has been paying attention and is aware of the driving forces within the industry.
Surely by now, you’ve began the process of finding out what advisory services small business owners are in need of. You may have even started determining which services you are best suited to offer with the resources and skills already in place. The next thought that comes across your mind is a difficult one. “How much should I charge for providing these value-added services?”
If it seems impossible to find the perfect price point that will attract new clients and keep existing ones happy, that’s because there’s a good chance it doesn’t exist. The reason being is that different business owners put a different value on the same services you offer.
At the end of your first meeting, they will inevitably ask,”What’s the price?” The problem will not be your answer, it will come from the fact that they were thinking of a different number. If your number is higher, they may seem hesitant or uneasy committing that type of investment to your services. On the other hand, if your client desperately needs your expertise and holds that value high, you could be providing that service for much ‘cheaper’ than they would of been willing to pay.
After you have already stated your asking price, it can be hard to renegotiate. By instituting a menu or a la carte pricing for prospective business advisory clients, you can offer everything the buyer needs, while avoiding being underpaid. This control and choice for the buyer is critical in making sure they are in position to purchase your services.
Some will recognize the value you deliver more easily than others, don’t be discouraged by those who do not easily understand what a business advisor can do for them.
On the other hand, if you find that very few are in position to pay your asking price it could be that your offerings are priced too high. Another solution to decrease your asking price is by becoming more cost effective in providing this value so that you are able to service clients more efficiently. This allows you not only to charge less for your advisory services, but also the ability to get more ‘touches’ with your clients that will deepen trust and foster greater engagement from them.
When outlining all the services you have made available to clients focus on the benefit(s) they will derive from the feature, rather than the features and tools themselves. This will help frame the expected ROI that every business owner will surely want to know before making an investment into your advisory services.
Billing by the hour or day is a very ineffective way of delivering value and building the trust and confidence your client has in you. What constitutes time well spent, or even what a working day is defined as, is entirely dependent on the individual. By beginning with explaining how this investment will benefit them and giving them the choice of multiple offerings they will have all the information necessary to move forward.
Likewise, you will never be put in a position of either walking back on your initial offer or being underpaid for your expertise and knowledge of business advisory services. This is a good way to increase retention and closing rates, and drive new growth in an era where many firms are struggling to do this. Know your worth and be confident in your abilities, it will be apparent to clients whether or not you believe in the value you are providing.
Doing away with hourly billing will not only make your clients happy, but you will also avoid the many pitfalls that come along with it. Put your firm in position to succeed by billing for value and giving prospective clients a choice and control in their decision.