Episode #036 Top 4 Ways To Boost Your Bookkeeping Business Profit
There’s been quite a buzz in the bookkeeping industry for many years, about growing your business. But many bookkeepers actually feel overwhelmed by the pressure and complications that come with business growth.
If you think that the only way to boost your business profit is through growth, then you definitely need to take a listen to this episode. In it, Amy talks about the top 4 ways to boost the profitability of your bookkeeping business, in clear actionable ways that will work for YOUR business.
Host: Amy Hooke
Guest speaker: None
Topic: Top 4 Ways To Boost Your Bookkeeping Business Profit
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Good morning. Welcome back again today. Thank you for joining me today. We're going to be talking about how to boost your bookkeeping business profit. So if you've been around for a while, there's been a buzz in the bookkeeping industry for many years with growing your business being all the rage. And, you know, many bookkeepers actually feel overwhelmed by the pressure that comes with growing their business.
You know, if you've been trying to grow your business for a while, you'll know that business growth comes with all kinds of challenges, such as staffing issues, cash flow issues because, you know staff need to be paid on time every time. Still, like with supplies, you could negotiate a little bit of extra time to pay once you've got a payroll on board you need to pay those staff regularly and on time every time. And then, of course, as you grow you need, you know you have a greater need for more comprehensive solutions. With your software, you need watertight business processes, and you also need security procedures in place, especially if you've got an online business.
You know, the reality is, if you want to grow, you need a healthy cash flow, and so you know you'll be trying to generate more leads. New clients and on board them into the business will be trying to figure out which existing clients you want toMove on. You'll be looking at trying to generate more business on a consistent basis, so you're probably going to need to start planning all sorts of different things As you grow. You're going to have to start paying yourself a proper salary instead of just dipping into the business funds to pay your living expenses and you know it can be exhausting.
So you know, if you've been a solo business operator or a contractor with a small client base for a while, you can get by by just winging it. And you know for a lot of us. That's how we run our businesses. But as a business owner with a team, you won't last very long unless you change your approach. So, in a nutshell, I guess what I'm saying is growing isn't for the faint hearted. And I said earlier, If you're already doing this, you will have related to some of the things that I said already. And by now, you know, you probably already think thinking Yes, yes, I've experienced that.
If you've got a decent client base, you know you've got a decent turnover and that kind of thing you might be actually, at the point where you're wondering, Do I want to grow bigger or do I want to stop growing? Do I want to just manage things the way that they are? So if you are thinking of growing your bookkeeping business and you want to get bigger than I highly recommend that you keep listening and if you've decided that you don't want to grow your business, but you'd love to take home some more profit or maybe have have a little bit more free time than you'd keep. Keep listening. But for those of you who you know, you've already recognised that your business is a hobby or a little bit of side pocket money on the side. Just prop up your family income and that kind of thing. You know, that's completely okay. You don't have to grow your business. And that's kind of the point that I want to make here is that, you know, growing your business is the decision, and it's not for everybody. All right, So if you're still with me and you're one of those people that does one either grow their business or stop growing and actually optimise their business, get a little bit more profit or maybe a bit more free time, then keep listening.
So let's jump in now. And we're going to talk about the top four ways that I've come up with to boost your bookkeeping business profits.
All right, let's get stuck in today. So number one is get more clients. So what is the number one thing that comes to mind when you think about growing your business? When someone talks about growing your business? The first thing that comes tio my mind is to get more clients. So maybe it sounds obvious. But, you know, just like I was saying in the first part, you actually need to be honest with yourself. Is that what you really want? Do you really want more clients. Now, maybe you've never really thought about it before. But if if you haven't, you know, have a think about that, not now. If you're thinking the way to grow your business is to get more clients and ask yourself, Why do I want? Or clients?
Is the reason for wanting more clients because you want to grow? Or is it because you want more money? I think it's really good to have an answer to this question, and the reason for that is, well, basically, I hate to break it to you, but getting more clients isn't always the best way to get more money. In fact, sometimes getting more clients isn't going to lead to more money. Now that might sound a little bit weird. You might be thinking, How is this actually possible? So I guess what I want to say is that if your motivation is that you want to take home more money at the end of the day, then getting clients may or may not be the best approach, and I'll let you know why.
So, firstly, more clients means more work, So bringing on more clients means automatically more hours and more hours mean more work either for yourself or if you have a team, more work for your staff this. You know, this might be something that you have thought about. Maybe you haven't. But, you know, when I think about this, it leads to a whole host of different questions. For example, do you have the capacity to grow your team, or do you have personal capacity for your own workload?
And then that kind of leads to the next question, which is, Do you want to increase your work load? Do you want to grow your team? So a lot of us think I'd love to have more money, so we automatically think that means okay, I need more clients, but we never really sit down and think, Well, do I actually want more clients, or do I just want more income? Or do I just want more free time? Or do I just want more of something else? So it's really good to actually spend some time thinking about this, because if you don't want to increase your personal load and you don't want to increase your team capacity, then growing your income by increasing your client base could be actually a bad idea.
And the good news is that you don't have to grow your income to grow your profit. Hooray! So the second point in this is that more clients mean more costs. So, apart from the fact that paying Mohr that having more staff means that you're paying more wages, there's other costs are also go up along with your income. So, for example, the more clients you bring on board, the more software costs you're potentially going to have, the higher your insurance cost goes and so on, you can probably come up with lots of different additional costs that get added to your business. When you hire, you've got training staff training costs.
You're going to have all of those costs that come initially with on boarding the staff where there may not be as productive, and as you bring on more clients, especially if you're not in a niche, then you might have to expand your skills and your team's skill set. So perhaps you might start to grow more cop with more clients, and then you're having to learn some new software programmes. You're learning your procedures. You might be branching into different industries, so there's going to be costs associated with that, especially initially. And that's why a lot of people find that when they get more clients to start to grow their business, they find that either don't have more money or they actually have so little time. And, you know, even the stress that comes. So that takes me to my next point, which is more clients actually can mean more headaches. So you're always gonna have problems in business and you're always going to have problems in business with clients. But there's two different kinds of problems.
There's good ones and there's bad ones. So good problems of those that come with the territory of working with people that you like and people that you enjoy working with. And these are problems that just happen along the way, and they cause you and your team in the end and also your clients to grow in a positive way, and then we all know that there's also the possibility off bad problems, so bad problems that the kind that keep you up at night and wondering why on earth did I engage this client in the first place? Sometimes you're thinking, Why didn't I listen to my gut feeling In the beginning, I knew this client wasn't a good fit. And these are people who can steal your time. They question your bills and they disrespect your team and your expertise.
So the thing is, I've talked about idea clients before past podcasts, and I talk about it again, you know, in my blogged and various teachings. And I can't stress this enough. But if you know who you are, ideal clients are. You know how to find more people like this, then by all means, you're actually in a good position to grow your client base. But if you have a lot of clients causing the bad problems, then hat is a very good sign that you don't know who your ideal client is. And in that case, I suggest that you just take a bit of time out to focus on that first before trying to be gone, more clients, and I'll just give you a little tip here. The best way to find out who your ideal client is is to list every single characteristic you could think about the clients that you don't enjoy working with on their next to each characteristic right? The thing that you the opposite to that characteristic and you'll probably find within that list of new characteristics these are the people that you really loved working with. So that's a little tip there that can help you on deal. Keep moving forward with this topic today because you're probably wondering why by now how on earth am I going to take home more money if I don't bring on more clients at what other ways are there to do it? So that leads me to number two.
So Number two is to spend less money. Hooray! So but there's a good old saying that the best way to increase your profit is to spend less and earn more. And that's really, really great advice if you don't need to follow it. So you know, to be honest, I quite that kind of advice to of being about the equivalent off. The best way to lose weight is to eat less and move more. Both of those sayings are wrong because they failed to factor into things. And those two things are reality and the complexity of reality. So let's talk a little bit about the whole spend less. Make more and I'm going to use weight loss is an analogy here because just like in business, there's always more going on beneath the surface. So when it comes to weight loss, eat less. Move more is a great idea if you're male and you have no existing health conditions, and you have a super fast metabolism and well balanced hormone. So, for example, if you have thyroid issue's adrenal fatigue, diabetes or any other kinds of health conditions, especially the ones that affect your hormones than eating less and exercising more can actually make you unwell. And it can, even in the long term slowed down your metabolism. And so when it comes to weight loss, many people that are overweight need toe actually eat mohr, and so people keep fit fine, trying to figure out ways to pay less. And they actually need thio more because when it comes to metabolism. If you eat too little, our body thinks that we need to conserve energy. And so then when we do eat sometimes, especially if I stressed or really busy, we can tend to a food that's not good quality. So it's just the same in business. So when you try to solve the prophet problem with the get more clients, you may find yourself with less profit and less money.
If you take that approach and then also, this might result in you having less time and less moat mental focus as well. So let's compare business to the eat to the health issue by talking about a team or of the right stuff. So what we're doing here is we're flipping the eat less
throwaway line, and we're talking about eating more. So when it comes to weight loss, the better advice than to eat less is to eat more off the right stuff. To eat more vitamin and mineral packed leafy green vegetables. Dittemore healthy omega three fats eat more grass fed red meat and eat less of the wrong stuff like process foods, trans fat, sugary drinks, cakes, lollies and start to vegetables and grains, and you probably don't want to hear this. But maybe just put down the bottle of wine a little bit earlier in the evening as well. Because also, alcohol into much quantity isn't good for your health. So to contrast this to your business, the better advice would look like this. Spend more money on things that help you in your business and help you to move forward like training your team, allowing your employees to work on improving your business processes and spend less time obsessing about trying to make a choice. Every cent that you spend on wages his billable time because the reality is, is the employees they don't need to be billable the time. Although it's great, you know, you'll find that if you did, if you allow your employees to invest in your business and build your processes and things like that, then you set up your administration processes. Then your business will actually be able to run more effectively.
And so another thing that you might think about spending more time on would be getting the support that you need to improve your cash flow in your profits and spending less time on following the next bad or trend in the industry. So you could think about spending more money on a great software solution that can help you to get the data that you need to make smart business decisions or in an education programme that's specific to helping you either be about a business owner or to be about a bookkeeper. And on the flip side, you can spend less money on jet setting around to every software convention that crops up, running around two bookkeeper coffee meet ups or joining and signing up every single webinar that pops up.
So I think that what you can get the point of what I'm saying. All I'm saying here is it's not about spending less. It's about directing more effort into thinking about what you want and what you need to reach your goals and making a plan to get there and less effort on following the advice of other book keepers who are showing off their latest ideas on Facebook because you've got to remember that this is about you. You don't even know if those bookkeepers on Facebook know what they're talking about. And also you don't know if those bookkeeper's know what they want, let alone how to get there. So although it's going to Facebook for support is definitely something that's helped bookkeepers, and it helps us, you know, to be able to have that community there.
We have to make sure that we're doing the right thing for us rather than just trying to copy and go along with what other people are doing. So even if the bookkeepers on Facebook groups know what they're doing, it doesn't mean they understand you. They don't know your business. They don't know your business journey.
And so, just like weight loss, it's not a simple equation of simply eat less and move more business profits are just not a simple case of spend less and make more. So what we need to do is stop oversimplifying it and stop doing things that aren't going to help. So really, we need to be wary when people come along with simple equations like eat less and move more.
These are throwing lines and if you see a throw a line like that, you've got to know that it's not gonna work for everybody in health, business, finance or even life in general, because, you know, like your unique your business is unique. And even though people like to think that we'll keep the same in some way, there is no other bookkeeper like you, and there's no other bookkeeping practise. It's just like yours. Just so, just like in your health, where maybe you might need to go get some blood tests and some scans to work out what's going on underneath the surface. You also need to diagnose what's going on your business, what's really going in your business. And to do that, you need insightful understanding into your clients and into your own business in order to determine the right actions to take or not take. So if you start to focus on spending less time and money and effort on the wrong things, things that don't, that you don't need things that send you back words such as memberships that you never use software that's not the right fit or employees that are not the right fit for your business. Then you start to free up your time and money and efforts to spend it on the right things, things that move your business forward, things to improve efficiency.
Investing in digital marketing, hiring a business coach, implementing a task or time management software so that you can manage your team's performance. These are all good things, and so if you manage to trim down some of your expenses, it may increase your profit. But it's not always the case. And if you do really want to invest so much effort into doing something that you're not even sure is going to work. Is that really a good idea? So anyway, speaking of effort, I think that's actually a really good segue way to go into the third way that you can boost your profits.
So Number three is to be more productive, efficient and effective. So let's talk a little bit about that. So first, at first glance, productivity and efficiency and effectiveness, they all kind of say on the same, like actually sound like they mean the same thing. But I don't know if you ever thought about it before, but productivity and efficiency are actually opposites in a way, so productivity is the amount of work that's produced or delivered by your team and I'd say for sure what we're talking about. Quantity and efficiency is the amount of resource is consumed. Two different deliver the service. So we're talking about effort. So it's quantity versus effort, so productivity and efficiency are actually in competition with each other.
Effectiveness is a the 3rd one which is about being able to deliver the work to your clients in the quickest amount of time without kompromat compromising quality. So it's a bit of a mouthful, so I think what I'm going to do is give you a little bit of an example to bring it to life.
Let's say you sit down and have a motivational session with your team about productivity, as in getting more work done more quickly. Afterwards, your team go off to work and they get. They work very hard and they get all your quarterly accounts reconciled. A few at, Let's say, a few hours or days. Whatever. Quick out they get it done quick up than they normally do it. And so you think great. Are the teams so productive now and at face value? It looks like a good thing. But when you cheque the accounts, you start to notice that there's quite a lot of mistakes and a number of the clients work needs to be redone a little bit. So then you write off some time and you also you start to notice that you've got really too tired staff, couple of staff take some sick days and then you start to realise that although you were more productive, I the quantity of the output within a certain timeframe you were actually in the long run, less efficient. So more time, effort, expense and energy were consumed in the process. And in the end, the process actually took longer. So that's to show you how productivity and efficiency are actually in competition with each other.
And so productivity tools. All the rage, but they won't cut the mustard. Basically, there's plenty out there, and they can help you to manage and leverage your two biggest assets. Do you know what your two biggest assets are? If you haven't thought about it before, I'm going to let you know it is your team and your software. So, in a traditional business, your assets are the machinery that produced the products in a service based business, like bookkeeping, your machines for want of a better word. And hopefully we don't ever think of people like machines, but your machines are your people and your platform, so that that's the two. And at first glance, wages and software are gonna appear like their expenses. We always look at these. These are These are just sees, you know, cost that. I didn't wish. I wish that I didn't have to pay.
But you need to stop thinking that way, and you need to think about them as assets or investments. And here's why: Productivity's task management task management tools are They're really great basis for coaching a team. You can use them to measure performance off each team member, and you can get inside into the activities that are happening within the business.
But the tools in, in and off themselves, they're not sufficient to be able to measure through productivity. They can't measure efficiency and effectiveness in the way that you need them to. And the reason for that is these tools are only showing you part of the picture. They're showing activities and potentially per client or per project profitability. But how are you actually going to use that information to affect your profit?
Your bottom line, you need to actually also remember that when you're looking at the data that comes from your productivity software, most of what you're looking at is historical data. So, for example, by the time you review your touch staff time sheets at the end of the week or the month, it's already happened. And so hindsight is a beautiful thing. So you know, at least to some extent, that hindsight will arm you with the information you can use to plan better for the future. And you can use that information to start to develop some key performance indicators. KPIs for your team. But how do you know for sure that this is going to affect your bottom line and given what I've said about productivity and efficiency being in competition with each other so you might use those tools to get your staff to work quicker or spend less time on things. But maybe you're compromising quality, and that's not something you can afford to do in a bookkeeping business. So although you need these tools, you need to supplement the use of thumb with the use of your financial statements and how to interpret them.
So what you need to learn to do is to dig beneath the surface off your financial statements on I'm talking About Profit and Loss and Balance Sheet and also the statement of cash flows. But we won't go too much into that today. But these are critical for decision making, although many businesses, as you probably know as a bookkeeper, right these off as pointless and unhelpful. But when it comes to finding out how effective your income, how when it comes to finding out how to actually make a difference your income and your expenditure, your productivity, product efficiency and effectiveness, you actually need to dig into the financial statements. So in order to find the information that you need, you need to look beneath the surface off the reports. And what that means is you need to know what to measure, how to measure it on what the results that you get mean. And then once you get the results, you need to make a strategy or plan to approach converting the current results into smaller, measurable actions. And this is how you develop your KPIs for your team that you will lead you towards a better result. Now, just a side note here, you hear me talking about business goals and things like that. If you don't know what your goals are, you can't measure anything so you can compare your bank balance at the end of the month to profit and loss statement. Or, you know, you can compare this month's profit to last month's profit. We can compared this month's activity to last month's activity. Or you can compare this month's bill to, last month's bill for a client.
But even then, it's not really giving you true insight. And also, you know, I can't count how many times bookkeepers have said to me that they're earning lots of money, but there's sort of nothing left over for them. So productivity, efficiency and effectiveness need to be measured also in your financial reports in your numbers. And so even though business owners are trying to convince you that P and L a balance sheet a meaningless as a bookkeeper, you know that that's not the case.
And, you know, like I mean, hopefully that's something that you know. It's quite funny, because when I speak to bookkeepers, they often say our business owners don't care about the financial statements. But do you care about the financial statements and do you understand them? And do you know how to buy in your own business before you go on to teacher to business owners? As about keeping business owner, you've You've probably got a set of your own goals, both personal individual goals and also business goals, And the purpose behind these goals is what drives you to do what you do. You might be thinking more. Profit is not your number one priority or money is not your number one priority. But the reality is without money. You're basically living on a prayer because money is one of the underlying resource is that keeps the business running. So apart from personal goals and motivation. Your number one goal in a business is actually two: a higher great staff hire and train and keep great staff, I should say, and to find the right software platforms that you need to deliver your service effectively, efficiently and productively. Now the most important numbers that you're going to derive from your financial statements.
Well, there's three of them, so you've got number one the rate of effectiveness number two, the rate of efficiency and number three, the rate of productivity. Now I've said those three words quite a few times Effectiveness, efficiency and profit on productivity. So the rate of effectiveness is how you turn your assets, a k a. Your staff in yourself. Oh, costs into maximum revenue. The rate of efficiency is how well you convert your revenue into profits. And your rate of productivity is how how well you convert your profits into cash flow.
Sounds easy, right? See, I told you, it's not as hard as you think, and you might be thinking more. How on earth do I do that? While that is a skill that you need to learn, that is something that you know that I can help you with it, something that we can help you with that savvy. But it's something you need to understand. And once you learn that you need to develop the muscle and practise it, because once you do, you are actually begin moving to the next level as a business owner. Now, is that something that you want to do or not? As a bookkeeper, I know you're great with numbers,but if you don't know how to calculate those three very important numbers that I told you about then, you know, like it's some point you will be able to get help with that and hearing me talk about this should actually now be motivating you to find out.
Now, if you're not motivated to find out if you're hearing this and you're thinking I don't really care to know any of this information, then I'm going to assume that your business is a hobby and it really serves. You ask pocket money, and that is completely legitimate. Okay, there is nothing wrong with not wanting to grow your business and to have have a side hustle and to be able to just bring in an extra bit of income. But if you're thinking too, May I need to know how to work out those numbers so I could make a plan to move forward, then congratulations with lots of cheering and confetti and balloons and probably a glass of bubbly because you've just graduated to the next level of being a business owner. So what I want to do now is to keep moving forward to the fourth and final way that you can improve your bookkeeping business profits.
Number four is to change your pricing structure
So you might not have ever considered this before. But a changed a price can affect your profit more than any of the other approaches that I've done and other approaches that are also not included on the list. So, in fact, according to Harvard Business Review, one, a 1% increase in price can create an 11% increase in operating profit. Is that so? There was a Harvard Business Review article titled Managing Price to Gaining Profit, which you can Look up online by Michael Varn and Robert L. Rosiello. And these guys basically said improvements in price typically have 3 to 4 times the effect on profitability, as proportionate.
Increases in is proportionate to increases in value. And so to put that in everyday language, what they're saying here is that the the improvement changing a price can yield more profit compared to increasing the volume of sales. So it's not as difficult as you think. I'm not saying is easy. If it was easy, Cos wouldn't pay millions of dollars to higher pricing consultants to get their pricing strategy right? So it's not easy.
It could be a challenge to find the right balance of how much to charge. But that's only half the storey. The other half is about value and positioning. So it's not just all about how much to charge in order to change your pricing structure in a way that's going to benefit you and your clients equally. Okay, so it's not just about you and your business. It's also about your client's. It requires some work, and that work involves understanding what your clients value. So in order to understand what your clients value, you need to know who your clients are and what problems you solve for them.
So in order to understand what your clients value, you need to know who they are. So a good place to start is to understand this both on an individual level and a broader scale off the context that they're operating in. The context that I'm talking about is their industry. So, for example, we all know that the construction industry have specific issues in the area off debtor days. So this is the time between when a new client comes along and signs a contract in the issue the company issues them with an invoice and the payments can take up to 90 days to come through. And this is, you know, this could be an industry standard. And then you've got the hospitality industry, which anyone who's worked for cafes and restaurants will know that hospitality industry struggle with high staff turnovers and also the risks that come with paying cash wages. The temptation to pay cash wages and also difficulty because it tends to be highly cash based business this difficulty and planning ahead for bass and superannuation payments. So business owners often find themselves that best time without the money to pay their bills. So both hospitality and construction industries experience significant trail and challenges when it comes to understanding awards and managing payroll. So you've got things like allowances.
You've got rosters Rasta Ring, and you've got penalty rates. A CZ Well, a CZ well is what I mentioned before, which could be high staff turnover, especially more so in the hospitality industry than the construction industry. So another context that we could be talking about might be location. So, for example, country businesses might be limited in the amount of budget they can contribute towards bookkeeping services? No, Always like. It's not necessarily a money being. It's not the country. Businesses earn less money, but its more traditional than in the country. Maybe a bookkeeper charges less so you've got to be. You've got to consider where your businesses base to be able to choose your prices, whereas urban business is kind of expect a high price bookkeeper. But because there's so many out there offering seemingly the exact same service for the exact same price, it's hard for them to decide and differentiate. And then you've got online businesses who are pretty likely to struggle with their e commerce platform stripe and papal Rick It reconciliations, which we all love to hate and managing memberships or customer payment declines efficiently, so the context could be the type of accounts as well as the location. So, for example, companies that a product basic struggle with inventory management and into software reconciliations, retail businesses going to struggle with point of sale reconciliations in the management of petty cash and project based businesses may find it hard to know the profitability of individual projects and to manage their client were work in progress. So as you can see there's lots of different examples. But there's no such thing as just a bookie that these days, because every bookkeeper hasn't opportunity to become an expert in their field because off the diversity of all the different types of business owners out there. Bookkeeper's hold the number hold one of the most confidential privilege. Trust the positions in a business. They have the private phone number of the business owner. They can walk into the business owners office without knocking whenever they want their privy to the ins and outs of the daily running of the business. And it's and they also know the most closely held secrets off the business owner, especially when it comes to the area or finance. And so,
for now, you're also learning that you held the key to every business owners financial breakthroughs in what you're actually learning from May. Right now, this within this is the key to the financial breakthrough off your clients. The problem is, most most bookkeepers are going through the motions and don't really think about this kind of stuff strategically. So a lot of what keepers haven't thought about their neesh and I'm talking about the bookkeepers that I've spoken to might not be you personally, but many bookkeepers have told me they've never thought about a niche. Well, they think that it's not a good idea. They don't understand their client profile or their target markets. They think it's not important. And the problem is, if you don't know what kind of clients that you want to serve, then you spread very thin in your ability to differentiate. And as a result, it can prove it could be difficult to improve your productivity, efficiency and effectiveness in your business.
So as you can see in the first example that I gave on how to boost your profits, increasing your income can actually decrease your profit. It can definitely decrease your amount of available time, that's for sure. And in the second example of decreasing your costs, it can also have the same effect or very, very minor effect on your bottom line for a lot of effort. Whereas in the third example of improving productivity, the effectiveness and efficiency, you'll have a large effect on your profit.
However, it's not a get rich quick plan can actually take about 12 months or even more to implement that. So once you get those numbers in your hand and you understand where the business is that it can take, it can take a year or more to turn that around with a very measured, strategic, consistent implemented plan. You can actually do it, whereas a change to your pricing structure can. And I don't want to make this sound like, you know it's an overnight improvement, but you can improve your cash flow on profit in a very short amount of time. So the bookkeeper's that I worked with on their pricing, we get it all done in a month. And that's the initial part. The initial change that's happened, which is all about, you know, firstly understanding your goals, planning your salary planning at your team and what kept capacity you'll need for your team. Putting together a little bit of a many marketing strategy or a little mini marketing forecast, but really just going on. And so what we do is we actually build the whole I build the whole system for the book keeper to use, so there's sort of no hands on work that needs to be done. There and that process only takes four weeks. And so from then on, it's a few more months of perfecting the process and getting used to, you know, using it because you're in a new way of billing or in a new mind set, you're gonna have new business owners approaching new. Of course, it takes a little while also to transition existing client basis, especially have a lot of clients it can take
It can take up to three months to transition your clients because you want to give them a bit of notice. You don't want to surprise wth. Um, you don't want to just spring it on them and say, Hey, guess why everything is changing tomorrow. You like you've got to prepare them for the change on dso. You know, like I help what keepers do that I helped like we do phones, groups and all sorts of things. And so from there, you know, you're looking at about three months max to transition a large client base and then from there is just learning how to get used to doing the quotes. When a new client comes in to get get a quote, you know, putting together those proposals and being able to quickly put that proposal together and to send it off to the client. But without that kind of emotional involvement that we're so used to like, What if they say no? What if it's too much of that sort of stuff?
Anyway? The last thing I want to talk about is putting up your price is so this is all part of the fourth approach, which is about changing your pricing structure and its very common. It's another catchphrase. It's in our industry. It's all about putting up your price is so according to the most recent surveys by the ACB, the Institute of Certified Bookkeepers and the Australian will keep his network et bien eso they do a survey every year. At the moment, the industry rate average rate for bookkeepers is about $65 an hour with high end. We're keeping getting charged out more around the $80 mark so often. When will keep us here? This they think I'm charging less than that. Should I put up my prices and everyone kind of chips in and the industry and says, you know, in the Facebook groups and everything and they go, Yeah, yeah, you should charge more. You should charge more and honestly, that there's only one accurate answer to the question. Should I put up my prices? And that question that answer is it depends.
And the problem with catch like phrases is that their generic generalised notions that don't take any consideration off any of the following important aspect off your business. So the aspects of your business that are important are your personal goals, your business, financial goals, how big you want to grow or, if you want to grow it all thie capacity of your team if you have one. Or, if you want one that what's best for your clients, who your ideal client is on, whether you're in a niche where the vertical horizontal are diagonal and what other problems off your target market, What's it a struggle with? And what are the solutions that you want to offer and are able to offer? What's your personal expertise, qualification, skill level and work ethic? And what's the skill level qualification of work ethic? Think of your team. Okay, quite a big lier stripe. So the reality is that putting up your price is in order to bring yourself in line with industry. Average rates is not only foolish, but it's not serving a client's. And in the long term, it's not serving an industry. It actually causes harm to the industry because business owners come along expecting a certain level of expertise for X amount of dollars and when they don't receive it.
That's very you know. That's very frustrating for a business owner, and it becomes confusing. It makes it difficult for business owners to compare one bookkeeper to another and to determine the right amount ofthe money to invest in a business book keeping. So I wouldn't be able to go past this conversation without mentioning value pricing or fixed pricing or hourly billing. Which one's best? So until you can outline the details of all of those points that I named above in a concise and comprehensive way, you're building a house on sand and because all those things that I listed are the foundation for you to be ableto price your services properly friend. That's regardless as to whether you end up charging by the hour by the project or retainers, or via fix pricing or value priced packages the way you price isn't the most important thing, despite what the others will have you believe.
But it seems to be the question on the lips of everybody in the bookkeeping industry. The question is, what is the best way to charge is an hourly fixed or value? What is the answer? And I'm going to tell you right now the answer is drum roll. It depends. And you know what? It depends on because I've just told you all of the different things that it depends on. There's a great big list there of what it depends on. So again, there's no throwaway line,
so I hope that today has been really helpful. I think that, you know, there's been so much information that you know, you can't possibly take it all in one go, but you'll be able to learn from a more as you go. And you know, if you're thinking to yourself, you know I actually want to make a difference in my bottom line. Then you need to do the work to lay the foundation.
You know, I like to be honest.
It's time to stop doing things the way that you've always done it, and it's time to stop following the crowd and just charging what everyone else charges, regardless of your goals, regardless of your clients and your financial needs in your expertise, you know it's really up to you what you do with your future. So what I want to do is to leave you. I wanted you to ask yourself these four questions right now. I want you to answer them honestly. You can write down the answers or just answer in your head or out loud.
So question number one. Do you want to stop sacrificing your own profits and goals?
If that's what you feel that you're doing? If you don't feel you're doing that, don't answer that question. That's fine. So that what you want to do do you want to? Improve your profit and get closer to your goals.
So I know it's a very short amount of time, but I hope you've had, I hope something at least came to mind. Whatever first came to mind, write it down.
So the second question is: Are you ready? Are you ready to make some changes that are going to make a positive difference in your business and as a result in your life.
So the third question is, if you could get the support and training that you needed to get so that you can get pricing for profit, would you love to get that training?
Do you feel that in this you need some help and support? And if that help and support was available, would you want it?
And my last question is, do you feel that it's time to reinvent yourself within your business and reposition yourself and your clients?
So if you did answer yes to these questions, then I would love to help you. Okay, so me and the team in Savvy would love to help you. So we are launching a new programme. So we're in a soft launch stage of the moment on our programme school pricing for profit, and we're going to have some upcoming intakes. So we've already got our first class of students, and so it only costs $100 for you to reserve a place and to start on the journey so that you could get prosper profit in your business and in a few months now you're going to look back and you're going to be very glad that he started. So I'd like you to cheque that out.
If you go to the www.thesavvybookkeeper.com.au/profit
Then you'll get all the information that you need about the pricing for profit programme and how you can get started. And I'd also like to encourage you that if you're you know, you're thinking about getting started with something like this, but you're just not sure you've got a couple of questions, and please book in a time you can book in a chance to chat to me or my team so you can go to the www.savvybookkeeper.com.au/freestrategy doesn't cost you anything, and you can book in a session there, and you can ask all of the questions that you have about improving or profits, whether it's changing or pricing or whether you've just heard some formulas that I've talked about, that you'd love to get a better understanding off or whether you've kind of reached a point where you're like, you know, I've been pushing myself to grow my business, but maybe it's not the best approach, you know. Or maybe you thought I'd love to grow my business, and I think it's the right thing to do. It doesn't really matter which kind of position that you're in. The thing that's most important is that you've reached a point where you're answering ‘yes’ those questions. You want to reinvent yourself in the business. You want your clients to see you differently, and you want to stop sacrificing your profit and goals just for the sake of being afraid to move past the way that you currently charge for your services.
You know we want you to be able to make that difference in your business, and we'd love to give you the training and support that you need so that you can improve your own profits and get yourself towards those goals. So anyway, I hope today has been very helpful again. Please visit the www.thesavvybookkeeper.com.au/profit and I also include the link. So don't worry about trying to remember, especially if you're driving or book in a free strategy session at www.thesavvybookkeeper.com.au/freestrategy. I look forward to talking to you. Thank you so much for your time today and I'll see you again next week.