Start to value price your accounting services
The concept of value pricing has appeal. But you wonder how to get started.
The path to separating your fees from time is a process. It’s similar to first learning how to ride a 2-wheel bike. Since you’re a bit unsteady in the beginning, you use training wheels. Once you gain balance, you remove the safety net.
We’ll use the good, better, and best model as the first steps to value price your services.
Good Rate. New clients inquire about your services. Determine the fixed monthly fee you would normally charge by calculating time by your firm’s hourly rate—let’s say it was $100. Now multiply that set fee by 1.5. Your proposal will be the new good rate of $150.
Enrol three new clients into the new good rate. You start to realise that not all clients are price-sensitive.
Better Rate. After enrolling three clients into your new good rate, you move to tier 2. This will be your better rate. Once again with new potential clients, determine the original fixed fee you would charge. Let’s continue to use the example of $100 as the original fixed fee. Now multiply that fixed fee by 2. Your new better rate for that client will be $200.
As you enrol new clients into your firm at the new better rate, you realise they are a higher quality client. Your ability to educate clients about the value of your firm’s services is also improving. By the way, you now earn double what you originally charged without any additional time spent working.
Best Rate. After you enrol three new clients into your new better rate it’s time to move to tier 3. This is your new best rate. Similar to the previous tiers, calculate what you would originally charge a new client for your services. Then multiply that by 3. Now the proposal states the fee is $300 instead of the original $100.
Doing this requires courage, not confidence. Now you earn 3x more than your original fee. The quality of service your firm delivers has improved since you don’t need as many clients to meet your revenue needs.
As you move up the tier, you gain back personal time without lowering your revenues. As a result, the burnout gradually withers away. Here’s the step-by-step guide to separate your fees from time.