Episode #040 The Bookkeeping Project Part 9
Is charging what you deserve helping you?
In this month's episode of The Bookkeepers' Voice, Amy shares her journey in developing growing compassion for small business owners with small budgets.
She talks about her journey of going against the industry grain, which pressures bookkeepers to put up their fees. Amy opens up about her experiences and challenges that led her to lower her own bookkeeping fees below the industry average and how it's not all about “charging what you deserve”.
The real message of this story is: “It's our industry and our clients are the reason we are in business, so it's important to take care of small business.”
Series: The Bookkeeping Project
Host: Amy Hooke
Guest speaker: None
Topic: The Bookkeeping Project Part 9
Good morning, welcome to the podcast today is the Bookkeeping Project, and I am a week behind because last Friday was a public holiday, and so I actually took the week off, and I didn't let you know, but anyway, you know now, obviously last week you would have noticed that there wasn't a podcast.
And so, it's been good actually because I've had an extra week to think about exactly what I want to talk about this month, and what I wanted to actually talk about is why I decided, when I restarted my bookkeeping business, to charge less than what I used to charge before.
And it actually worked out really well, but I didn't do the episode last week because I had a couple of inquiries come through this week, and I've been putting together some quotes, and it's been … yeah, I had an interesting conversation with somebody yesterday. Back when I was having my son, I had … so this was after I'd closed Off the Hook the first time, I was still getting a lot of leads through my website, so I used to just give them to my clients, the other bookkeepers that I was working with and so I'd just refer them out.
And usually what I'd do is refer the person to speak to three, a maximum of three bookkeepers that I know, and so I referred this person on to another bookkeeper, and I didn't even recognise the name, but someone came to me for a quote, and when I got on the phone to her, she said, “Oh, do you remember me, I contacted you a couple of years ago, and you were just about to have your baby, and so you couldn't take me on as a client, and you referred me to someone else”, and I said, “Oh, yeah”, … because I don't know, the business name had sort of rung a bell a little bit, but I just thought, “Oh, it's similar to that other business that contacted”, I didn't actually connect that it was the exact same one.
And so she said to me … because in her inquiry on the website, she'd actually said, “I'm currently working with a bookkeeper but it's not working out, and I'm not happy with the service”, and so I was like, “Oh, okay”, at this point, I didn't realise that it was the person that I'd referred on, and I thought, “Oh, okay, that's not good”, so I was happy to speak to her on the phone, and I sent her a couple of answers to her questions. So one of the questions she was asking, “What is your hourly rate, can you quote for the fees upfront?”, and she asked can you do this, this and this service?
And so it was quite funny, it's been really good for me going back into the business after having that time out because I've now seen how different my attitude is, so I remember back in the day when I'd first started the business, if someone came to me and if they started talking about price straight away, I would immediately get my back up, and I would feel defensive … now I wasn't like this in the very beginning, because in the very beginning, it was just me working at home on my own with my clients and that kind of thing, I wasn't connected in with social media, I didn't know there were Facebook groups for bookkeepers, and I didn't know there was a whole community of bookkeepers out there, I didn't know any other bookkeepers at this point, this was early 2015. So I was just working on my own, so if someone asked about what my hourly rate was, I'd just say upfront, “Oh, my hourly rate is $100 an hour.”
And so then, when I joined the bookkeeping community … and I never had anyone question my rates when I was charging that much, like back in the beginning, the people would just say, “Okay, yep, no worries”, and then they'd just get started, and basically, it was when I joined bookkeeping groups on Facebook that I started to hear different things going around about how other people were charging, how the industry average with $65 an hour, I was hearing a lot of bookkeepers, or seeing a lot of bookkeepers telling other bookkeepers they should increase their rates, and there was a lot going on in conversation about how to respond if someone questions your rates.
And I started to think, “Oh, so when people call and ask what the price is for the bookkeeping, I'm supposed to get offended, okay”, and so I took that on board. I mean that wasn't my exact process, but it did sink in to me, and I thought, “Yeah, yeah, you should value and appreciate my expertise thank you very much, I've been doing bookkeeping for 20 years now, and I'm an expert in my field, and I'm a registered BAS agent, I'm not just a bookkeeper”, and all this sort of stuff. So anyway, I felt this defensiveness come to me and I didn't realise that it was something that I'd kind of picked up from the bookkeeping community, and so I just went along with it, and I thought that it was correct, and I started to think that business owners that asked about about price were kind of idiots.
And so I started working with a mentor, and the advice from that mentor was that if someone got on the phone with a call and said, “How much do you charge, or what's your hourly rate?”, the response was supposed to be, “If your first question is asking about my rates, then we're too expensive for you”, so some sort of response like that, and so I was like, “Okay”, and so I remember the first time I actually said that to someone, I was like, I don't know, I felt so uncomfortable, and I remembered when I was saying it that I was just thinking to myself, “This isn't me”, but I sort of went ahead with it, and I remember the conversation with this particular person and they're like, “Oh, oh”, and then obviously the business owner got defensive, and they were a little bit confused.
And anyway, I got off the phone, but it was quite an awkward conversation, and I just think back to that time, and I just remember how much that I was sort of drifting away from who I really thought that I was, and to me, it wasn't a good thing, but I'd developed this pride or arrogance towards business owners. And I've talked about this a lot in other episodes where I've talked about how I've had a change of heart towards my clients, and for me it's been a big eye opener, and I've been able to see my attitude towards business owners. And the biggest thing for me was when I became one of those business owners and I had to go through the process of hiring my own bookkeeper.
Anyway, so I'll go back into this conversation that I had with lady before I go on about rates and things like that, but basically, when I was speaking to this lady, so I got on the phone to her, and she said to me, “You were going off to have a baby and you couldn't work with me, so you recommended me to some other bookkeepers, and I ended up working with one of them”, and I said, “Oh, do you mind telling me which one?”, and so she told me the name of the bookkeeper, and I said, “Oh, okay, what's happened?”, and she said, “Look, she was really good at first, but now she just doesn't seem to be getting, like there's been mistakes in the file, and her availability just doesn't seem to be there, and I'm getting charged a lot of money, and I'm just not happy with the service, and so I remembered you.”
She said, “I remembered the conversation with you, and I remembered the name of your business, like it was such a cool name”, and she said, “I remembered your surname and that your business was Off The Hook Bookkeeping and your surname was Hooke, and I thought that was really cool”, so she said, “I actually remembered you, so I looked you up, and I looked on your website, and then obviously got back in contact with you.” So I was sort of thinking to myself, “Okay”, like it's a little bit awkward when somebody comes and tells you that one of your colleagues has not been doing a good job … because this is a bookkeeper that I really like and respect.
And so I haven't actually spoken to that bookkeeper at all, but I was planning to actually have a chat to her today, obviously, I'll probably have to get the client's permission to do that … so I haven't done her quote yet, I just had a chat to her through everything that she was looking for, and just to find out exactly what her needs are, what her budget is, what her expectations are and that kind of thing, and so she gave me a look in her zero file, so I can do a health check and that kind of thing.
But overnight, I was thinking … the first thing I thought this morning was, “I probably need to speak to the other bookkeeper”, because I don't know if that's an ethical issue to take that on, but I don't actually think it is, I think it's fine, but I like to just be open and transparent with my colleagues and that kind of thing, but then obviously we're under confidentiality, so I would have to get the client's permission and I don't know if she would mind, but I guess I could probably just say to her, “This is a colleague of mine, it is someone that I respect, so would you mind if I just let her know that I might be going to work with you, just to clear the air because I don't want any bad feelings there or anything like that.”
So I went through the conversation with her and I worked out what she wanted, and about halfway through the conversation … like the conversation was really great, she sounded really positive, and she was excited about working together, and then as we started to get through the questions … so I have an initial consult form that I've put together, and I go through that … I'll actually include a link to that because I've actually been giving that away for free, and so what that is is it's a online form that you can make a copy of your own, you can embed it on your website so that you can send people a customised link with your website, so you can do your website name, forward slash consult form or initial consult form or whatever you want to do, something that's easy to remember so you can send it to people, or easy if you want to jump on the website and grab it yourself.
So that's what I do, I send it to the client but a lot of people don't fill the form out, usually people like to talk through their issues, so what I do is, as they're talking, I fill the form out. So either way is fine, but I'll give you a copy of that, I've put together a little instruction video on how to use it. It is set up in Airtable, so it's a setup form, but if you prefer to use Google Forms or something like that, you're free to just copy it, I really don't mind, if that's helpful for you.
So I was going through the format, as I got to the end, I think I was about three quarters of the way through, and then her tone changed, all of a sudden she started to sound not as confident as she'd sounded before, and what it was was that she actually … she was excited to speak to me, she was looking forward to finding a new bookkeeper, and all this sort of stuff, and she was really quite happy and chipper about the business and everything, and then she started to talk about, I've got a couple of questions, to ask about it to ask if the accounts are up to date and if the tax returns are up to date and things like that, and so this client actually … I don't know, like some of her … I guess she got reminded that some of her affairs haven't exactly been the way that she would have wanted them to be.
At that point she got a little bit nervous, and I was talking to her … that's right, we were also talking about putting together a budget and things like that, so she was putting together her own budget, and I said, “Well look, we can help with that, we've got a mid-level bookkeeper, we've got a BAS agent, and we've got a senior level person, I don't know exactly what to call her when I speak to clients, but she's actually like a business planning and business finance specialist, so she works on high end budgets, financial forecasts, financial plans to go with the business plan, and the actual business plans themselves.”
And so I said, “Look, we do have a full team here”, so I said, “I also do business mentoring, but the full team here can actually work with you and help you with that budget if you want some help with that”, and then she started saying about her financial situation and so what I discovered through that conversation is that this lady … she was excited about her business, and it sounded like things were going really well, but then she started talking about how much income she's making and what her expenses are and her profit, and then she talked about how … and I said to her, “Okay, do you have any other streams of revenue?”, because her and her partner are in the business together, and I said to her, “Does your partner have another job, or are you two just relying on that income?”, and she said, “Actually, I wish we'd had another job, but this is all we've got.”
And through this process of speaking to her and understanding where she was at in her business, I thought, “Oh my gosh”, and I realised that, I feel that the real me is coming back from all of those years of trying to act like, “You're not a good fit for me because you don't have money to pour into your bookkeeping”, but I really felt compassion for this lady, and in the past, I viewed that as an issue, and I've thought to myself, “Oh, someone with no money, they're not going to be able to compensate me what I consider fairly for all my years of expertise”, and so I did feel compassion for her and I thought, “Well, I'd love to help this lady but I know obviously, I don't want to work for free or anything like that.”
But I told her about the extra things that we do, and she said, “How much do you charge for all this?”, I said, “Look, I'll put it together in a quote, and what I'll do is I'll give you some optional extras so that you know in the future those things are there, you don't have to take them up now, let's just focus on keeping your bookkeeping up to date so that you don't have to do any of it yourself, and we'll just go from there, when you get in a better financial position, then you can take on some of this stuff”, and I said, “Look, if I spot anything in your accounts that I think will help you, I'm not going to wait until you upgrade a consulting package, we're happy to give you advice along the way that will help you in your business.”
So she was just saying, “Oh, that would be great”, and I could tell by the way that she was talking that she was embarrassed about her financial situation, and I really feel that as bookkeepers, we need to consider the position that business owners are in. I don't know if you know, but bookkeeping practises, or bookkeeping, because of the fairly low cost … I don't know if you know this, but bookkeeping is one of the most profitable businesses that you can be in, like in terms of profit margins, so I think that's probably why all the accountants are trying to get into bookkeeping because bookkeeping is profitable.
So we're in a profitable industry, we're in jobs where we can earn a really big profit for what we do and I think sometimes it can cause us to lose empathy or compassion for the reality of business owners out there, so we all know the statistics … I don't know exactly what the number is because it changes every time I hear it, but 60% of businesses will go out of business in the first three years. There are people who say these statistics aren't real and that they're used for whatever agendas people have, but from my understanding, it is a statistic that comes from … so there's a statistic that comes from ASIC, and there's a statistic that comes from the Australia Bureau of Statistics.
So the Australia Bureau of Statistics is the one about the duration that people remain in business, and then the ASIC statistic is actually about companies that go into liquidation, so I think 50% of the companies that go into liquidation are profitable companies. What that means is that cashflow is an issue, there's a lack of planning that's happening as well for business owners, and also, I think the third reason is because business owners don't know where to go.
Now, I did have a conversation with this client because she was also looking for an accountant, I've spoken to so many business owners who have gone to their accountant for help, and all the accountants talk about is tax, and she said, “Oh, I'm not so worried about the price of my accountant, I think he's quite affordable, although it's more than I want to pay, but I think it's in the range of okay, but what I want is an accountant that can really help me with the financial position of my business”, and I said, “Well look, that's what we do. If you've got an affordable accountant, just stick with your accountant and don't worry about that, but the reality is that the expertise of accountants”, like okay … so there's two types of accountants, you've got accountants in business, so you've got company accountants, and then you've got tax agents who are in accounting practises.
And so these accountant specialise in taxation, and so don't be surprised if you go to an accountant to ask for help with your business and they're going to talk to you about tax. If you go to an accountant and say, “What's the best way for me to structure my business?”, they're going to be thinking from a mindset of how's the best way to structure for tax purposes. So when I was looking at structuring my own businesses for example, so obviously I've got two businesses, and I wanted to find out what's going to be the best structure for our companies to grow into the future, given the particular goals that we've got, and I found that when I spoke to accountants, they'd just keep giving me the tax advice, and so I was like, “Oh my gosh, I need to find someone who can give me business advice but on the structure”, and then I discovered it's not an accountant.
So I'd always thought that's what accountants do, no, so we found a lawyer who specialises in business structuring, he also specialises in intellectual property and trademarking and all that kind of thing, perfect person to go to for this, and so he's been super helpful. So I said to him, “My frustration is I keep going to accountants asking for help”, so everybody thinks accountants are meant to help people with their businesses, and accountants help people with tax.
There are some accountants out there that do help with the broader scope of things, but that's what accountants tend to specialise in, especially what we traditionally think of as accountants, whereas if you've got someone who's worked in a company, then they're more like a senior bookkeeper, if they've been like a financial controller or something like that, they're more like a bookkeeper than a tax agent is, if that makes sense.
So I chatted to her about her accountant, and I said, “We can actually do that, but we don't do tax returns, so you'll need to keep your accountant”, and then as we were talking through all of this, one of her comments to me then was … I actually asked her what her other bookkeeper, my colleague, had been charging her, and then she said to me, “Oh, I called this other bookkeeping practise and spoke to a lady called such and such”, I won't say her name, but she said, “I spoke to this lady and I was like, “I know her, she's one of my colleagues”, and she said, “Yeah, this lady said to me you shouldn't be looking for a bookkeeper. Because you're not turning over $500,000, then you shouldn't be trying to hire a bookkeeper. So when you're turning over $500,000, that's the right time to hire a bookkeeper.”
And I thought, “Oh my gosh”, I just said, “I'm so sorry on behalf of that person”, to me that is quite a rude thing to say. So she said to me, “Oh look, I've been wondering whether I should study a bookkeeping course”, and I said, “No, you don't need to study a bookkeeping course, there are affordable bookkeepers out there”, and she told me some of the rates that bookkeepers were charging her, and I was like, “Yeah, they're the same rates that I used to charge”, and I said, “Well look, we don't charge those rates anymore. I used to, when you called me last time, I used to charge between 80 and 110 an hour, and now I don't, so I put bookkeeping charges on $60 an hour, which is just under the industry average.”
Because we want to offer an affordable service to business owners, and I was like, “Oh my gosh”, when I'm saying all of this, I just really thought how much my heart has changed towards this whole thing. I think as bookkeepers that we have actually been overcharging for our services, and I'm not saying there aren't some unappreciative turkeys out there, because we all know there are.
So this was a really nice lady, she was embarrassed about her financial situation, she wants a good bookkeeper, she's tried to do it herself, she's not great with it, and finding that it's interfering with her getting on with marketing and growing her business. You would have heard me talk in the earlier weeks maybe, the Bookkeeping Project, episode three or four, I can't remember which one, but when I find it I'll post a link for you.
And I had this guy, he was just really rude, and just really secretive and when I tried to ask him just ordinary questions that are on my initial consult form, he was getting really defensive, or he wasn't answering my questions, like I was getting a really bad vibe from this guy, so basically there are people out there that are literally what we call tyre kicking or shopping on price, and that's those people that maybe they're rude about wanting to not pay much.
So I guess the thing that has been going through my mind over this last week is that supply and demand is a real thing, that's how markets operate, so we're in an industry, and an industry is a market, so what's been coming to me lately is a business owner's not a jerk for wanting to keep their costs down, because business is really hard firstly, and secondly, it's smart, wanting to keep your costs down as much as possible in business is smart.
So I'm not saying you should be rude to bookkeepers, like that's not nice, but at the same time, being wise about how much you're spending is actually smart, and so now I'm listening to my colleagues, my fellow bookkeepers talking about wanting to only work with business owners that have a lot of money so that the bookkeeping fees are not a concern for them, and I think to myself, “Well, that's a concern to me because for me, we should be wanting the best for our business owners, even if it means that at some point we put ourselves out of a job.”
I know that sounds terrible because obviously we want to hang onto clients as much as possible, and I've shared in past episodes where I really did the wrong thing, I used to want to make that business owner know how badly they needed me, and I made business owners feel stupid, honestly, and that was because of this attitude I took on, and I allowed that to override the real person that I actually am, and that person has been emerging over the last couple of years because I've been able to go, “I don't have to follow what everyone else in the industry is doing.”
If people are going, “Put your prices up, put your prices up, charge what you're worth”, and all of that kind of thing, I just think, “It's not about me”, to me, the charge what you're worth, charge the fees you deserve, all that thing, to me, that's all me, me, me, it's not actually thinking about the clients and what's best for them.
So yes, we need to have profitable businesses as well, but it doesn't have to be over the top, and so what I have been going through myself is learning how to put the shoe on the other foot, and so I did suggest that in one of my past podcasts where I said, “Have you ever tried to hire a bookkeeper yourself to do your own bookkeeping?”, and I'm not talking about hiring staff to do your client bookkeeping work, I'm talking about hiring a bookkeeper to do your bookkeeping, and I recommend it, I highly recommend it over any course or programme or professional development training that you could ever take, is to hire yourself a bookkeeper.
Go through the process of looking online and trying to find the right bookkeeper, and having a look out there and seeing all of these generic bookkeeping websites full of bookkeeping jargon, outdated, hard to find things, prices to see is this going to fit in with my budget, and not being able to find anything, and then hiring bookkeepers … like I thought to myself, “Well I'm going to be a hypocrite. If I don't pay a bookkeeper 80 to $100 an hour, like what I charge, then I'm a hypocrite”, so I thought I've got to practise what I preach, and so I hired my first bookkeeper at $80 an hour, and the bookkeeper had no time for me. I'm not saying that she didn't do a good job, and it's also another one of my colleagues, so with all respect, I would have to say that this person didn't really help me and I was disappointed about that.
So to pay 80 bucks an hour and not actually have anything really come back, no communication, the work that was given not really getting done and stuff like that, and I'm assuming it's because the person was thinking of trying to keep my fees down and that kind of thing. I'm glad that I didn't pay more than that now, because what I did was I then went through a process of looking for bookkeepers that charged less and less, and so I'm going to be completely honest with you right now, so this is going to be a bit of a shock, so we pay our bookkeepers … and I'm talking between our mid-level bookkeeper, our BAS agent and our senior person, who does all of the forecasting and business plans … we pay our bookkeepers between 20 and $37 an hour as contractors, that's a contractor rate.
And I can tell you now, they are far better than any of the 60, 70, $80 an hour bookkeepers that we've hired in the past. So they keep all of our accounts up to date on a weekly basis and also our internal accounts, they work out budgets and forecasts for us and for our clients, they give us cash positions, they give us alerts, they go through expenses and work out where or our clients can be saving money, and with the more expensive bookkeepers, I found they just didn't have time for us, because at the time, when we first started hiring bookkeepers, we were so small, so the accounts were never up to date, the bookkeeper just wanted to come in once a month and just quickly do everything, and so we had no current financial data for making critical business decisions.
And when cashflow is tight, you need to see those accounts up to date as much as possible, but the problem is business owners, when they're at that small stage, that's when they really need us, so this is a problem. I feel it's a problem, maybe when you're listening to this, you might be thinking, “Well, that's not for me”, and that's fine, that's fine, but I just know now that I can get a far better service for a lower price, and I would never … this is going to sound bad, and I really apologise, I don't want you to think that I'm betraying my own people here … but I would never pay again the rates to a bookkeeper that I personally used to charge myself, because I know I can get a better service for a lower rate, and there's nothing wrong with wanting to get a lower service at a better rate.
So there's a lot of experts out there in our industry, professionals as well as other bookkeepers, and they're just saying, “Put up your prices and charge what you're worth”, but if the market is demanding lower rates, then I'm starting to think that we should be paying attention because … this is the thing that started to concern me now is that if we're not willing to listen to business owners, who are the very reason that we are in business in the first place, then we can't exactly go crying when our clients go offshore to get cheaper bookkeeping, and they leave bookkeepers who are charging more so they can work with bookkeepers who are charging less.
Now I've done a few quotes this week for business owners, and some of the business owners I'm speaking to now, they're just hiring their own staff directly from the Philippines, like VA's and that kind of thing. So business owners are not stupid, they know what is fair, they know what the going rates are. So in the market you've got supply and demand, and if you've got people in the market who are willing to offer bookkeeping at a lower fee, then it is going to get really competitive.
And so I think business owners on some level are starting to actually get offended, like as they're finding out … obviously sometimes a client's been working with us for a long time and they might not know that the rates have changed because they're not looking for another bookkeeper, but let's say their friend comes along and goes, “Oh, I only pay $35 an hour for my bookkeeper.” To me, I just think, “Aren't they going to be offended by that? How am I going to justify”, and oh my gosh, I can't believe I'm saying this, but back in the day, I would have thought, “I don't have to justify my rates to you.” Whereas now, I'm thinking to myself, “I must be able to justify my rates, absolutely must be able to.”
So now, even when I do my proposals, I'm transparent about my pricing, I disclose the hourly rate for my bookkeeping on some of my proposals … not on all of them, on the small ones I don't, but if someone asks my hourly rate, I just say, “Look, the bookkeeping packages are based on $60 an hour.” I do charge more for payroll, I do charge more for BAS, I charge more for consulting, and I don't feel that this has affected the profitability of my business, I feel that my business is doing better, and I feel that my clients are less stressed about the fees, whereas before I felt like they're questioning my bills and they're wondering what's going on, and they're looking at their bookkeeping fees balance going up and up and up in their profit and loss, and they're thinking, “Oh wow, every cent that I pay to the bookkeeper could be profit for me”, and I thought these people were jerks, but now I realise they're just smart business owners, they're just trying to keep their costs down just like everybody else.
And so for me, I've put my rates down between $20 and $60 an hour, that's my decrease, like I've decreased my rates by between 20 and $60 an hour, and I did it against everybody's helpful advice, so I apologise if you're listening to this and you're one of the people that's given me advice to charge more, but I've decided to go against the grain because I want to serve business owners.
Like I feel sad about that statistic, I feel sad about the fact that we just assume that they're just jerks, or they're silly for not running their business properly, and not having enough profit and things like that, but if that's their livelihood, if that's the way that they put food on their table and look after their children and pay for their living expenses, then I want them to do well, and I want them to do well because I know what it feels like and I've been in that position myself, I've been in that position where … a lot of us have gone through this, but you speak to business owners, I speak to bookkeepers who have been through this, and myself as well, like having a season where your husband's out of work, maybe you're struggling in your family income because you're the only one that's providing the income.
There's all sort of things that happen in people's lives, and I think to myself, “These aren't jerk clients who are questioning our fees, these are real people, and these are our fellow Australians who are providing jobs”, small business owners are responsible for creating six million jobs or something like that … I don't know if that's the number, maybe that's the number of six million business owners in Australia, I can't remember, but anyway, so like a massive amount of Australian employment comes from these really small businesses.
Personally, I don't even know how many employees I have, I think I have eight … I always say I have eight, but I forget to update the numbers … so I think maybe, I don't know, there's three in the bookkeeping business, and then five, six, seven, I think seven in ten…but two of the people that work in the bookkeeping business work for savvy as well, so a bit over lap there. So anyway, I'm not that good with numbers even though I'm a bookkeeper, I can't add in my head, I need a spreadsheet.
Anyway, I know that you might not like to hear some of what I'm sharing, but I just wanted to be honest with you about this is where I'm at in terms of my charge out rates and the way that I feel about business owners, and I feel that … I don't know, I guess I just want to encourage my other colleagues to think more like business owners instead of taking it personally when people question our rates, because it's not personal, it really is not about us, and if we make it about us, we're going to miss something very important.
So putting your rates down doesn't mean you're actually going to earn less, and this is something that I teach other bookkeepers how to do, and that's fine, it's about finding what the clients value and helping them, and then from there, what you can actually do is … you don't have to jump … the point I'm going to try to make is that you don't have to throw people in the deep end, if someone has a low budget, you just start them on what they can afford, you just start them on basic bookkeeping and you get them up to date, and then as you build trust with them and as you start to get to know their business better, you'll understand the type of value that you can provide for them.
I do everything as a product, so I don't charge anything for an hourly rate, if I reach a point with a client … and I might just say, “Look, we've been working together monthly, but I feel like we need to do some intensive sessions, so what I'd like to do is four sessions together and also in between the sessions, we're going to build this forecast, we're going to put together a budget, we're going to review all of your expenses, we're going to attribute your revenue streams to your expenses, so we can work out your profit centres, we're going to create a payroll budget, we're going to do all of this and this is the fee.” And then they can take it or leave it.
They either want it or they don't, and they're either able to afford it or they're not, and they might go, “Okay, yep, that sounds great, but now's not the right time”, and that's also fine, like we don't have to go in there guns blazing, trying to charge for everything and that's why I do health checks. I actually ran a health check masterclass which I'll share the link to, and in the masterclass, I basically shared exactly the process that I go through to do a health check, and I include this in my quotes.
People are so scared about doing fixed prices, and I used to always be scared until I actually figured out how to do it, and it's just all about scoping the job, it's all about understanding where the boundaries sit and being able to articulate that in your engagement letter, and it's actually not that hard, like I can show you how to do it in 90 minutes if you want. So I think that's really important, then you don't have to worry about it, and then you can take the pressure off some of these smaller clients because okay, we can all say. “I'm going to charge what I deserve and I'm going to cull all of my terrible clients that don't have enough money”, and things like that.
I don't think that's right anymore, I used to just only want to work with people that are really wealthy who could just pour in money into my bank account without having to worry about anything and I just realise, that's not me, and that's not the way that I want to work.
I don't know how this is going to go, as I said at the very start of the year, this is an experiment for me, I'm just trying this out, so I guess you'll see over time how it's all going and I'll continue to share that with you, and yeah, that's it, now you know how much I charge, now you know how much I pay for bookkeepers, now you know my heart for business owners.
I want to see that statistic change, I don't want six out of 10 business owners going out of business. I want people to be able to provide for their families, not just for now, a lot of business owners are just living from pay check to pay check, but for my business, my vision is generational. I want to see my business living into the second and third generation, I want to provide something for my wider family and for the wider community as well, and so I think as bookkeepers, we're in a privileged position to be able to do that for business owners, we just have to get off our high horse sometimes and just think about how we can actually help, and if the person can't pay as much, what can we offer for that fee, and what's the best that we can do?
Maybe we don't need to have to go in there and try and fix everything, maybe we can just go in there and get their accounts up to date, and process their regular stuff, and then from there, just move with the client, build trust with them, build a relationship with them, and get to know them and know that in the short term, maybe they're not going to do everything our way, but over time, they're learning to trust us, and we have to actually also prove that we're trustworthy as well.
So that's where I'm at with the business, I've got a couple of quotes out there in the pipeline, one of them is not actually bookkeeping, I do PandaDoc setups, not just for bookkeepers, but also for business owners as well, so we design their documentation for them to do their quotes and stuff like that, because I want to help business owners improve their cashflow, I want to help them to protect themself from bad debt, so I want them to be able to have things in place that help them to outsource their invoicing, if they want to hire someone else to do their invoicing at some point and they want systematise things, I like to help them with that as well.
So it's just really, I think now we live in a day and age where we can think outside the box, we don't have to always do everything the way that things were traditionally done, because of the software, because of the platforms, because everything's online, we can do so much now and, but at the end of the day, we can only do what we can do as well, and so I think it's really just working out where we're at and what we're willing to offer, and how we can actually be of service to our clients, because bookkeepers are trusted people … I don't want to say trusted advisors because it's so cheesy … but we are trusted by business owners.
We know the ins and outs of the daily stuff, we know the private details of the business, we know the things that the business owners might not tell their partners, we know their secrets, we know how they're really doing financially, we know that how they're doing on the inside is different to how they're posting on social media and stuff like that, and that's fine, like we are in that trusted position where we actually have the ability to help people who want to be helped.
So hopefully you've enjoyed the episode, I've got a couple of things that I've mentioned in the session, the copy of my initial consult form. I recommend that you use this because it's going to help you to get to know the clients and help them get to know you, like in that initial call, and to help you to build rapport with them and collect the information that you need to give them a fixed price quote.
And then, check out the health check masterclass. That is a paid masterclass, but in there I give away a lot of templates for doing the health check. In one of the packages I give away even the engagement letter with the legal terms and conditions, and so there's lots of stuff in there, checklists, there's FAQ's, there's email templates, there's all sorts of goodies in there.
And this is literally what I actually use in my business, these are the tools that I'm literally using in Off the Hook Bookkeeping for doing my quotes, and so I show you how to do a quote at the end of that one, I show you how to put together a proposal, and all of the materials that you need are in there.
So have a lovely day, hope you enjoyed your week, and for those of you in Melbourne last week, hope you had a good long weekend last weekend, and Queensland, I think you guys have got one coming up soon as well, so hope you all enjoy that … unless I've missed it already, I don't know. Anyway, I'm sure that you'll all have a great weekend whether it's a long one or a short one, or whether you're working all weekend, I will see you next week.
We hope you enjoyed this podcast about charging what you deserve!
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