Archive for the ‘Profit Improvement’ Category
Guarantees make it easy for people to buy from you and enable you to control the deal.
For example, I guarantee your accounts will be done within 45 days and I will never charge you more than the agreed fixed price. The 45 day guarantee is better that 99% of most other accountants because most do not have a guarantee.
But, there are a few practical and fair conditions. The deal is on the basis you have booked the work in as part of your Fixed Price Agreement and get the bookkeeping to me what you said you would and in the agreed format. That’s fair, good for you and good for me because I can schedule work and plan more effectively.
What can you guarantee to make it easy for people to buy from you?
Over the years I have looked at many ways to grow my profits and my clients. Time and again I come back to pricing as the number one strategy.
I was listening to Reed Holden co-author of “Pricing With Confidence” talk about the importance of being a little arrogant. Not arrogant enough to put anyone off but confident enough in your value so you don’t offer discounts. Reed explained that it is important that you and your sales team feel good about your company and products because buyers often try and get lower prices by positioning you as a commodity.
It’s the same in my business. I get enquires where the person is looking for a lower accountancy fee than their current accountant. I am happy to talk because there are always way to work smarter using systems like Xero but I more the conversation quickly to value so the client sees my fee as an investment. It could be in a lower tax bill, time savings or greater security.
With business development services like On Track it will be higher profits, enhanced business value and/or the business being less dependant on them.
Confidence in your value = confidence in your price and that means higher profitability, so the question is “are you really confident in your value proposition when you are compared to a cheaper competitor?”
The hedgehog principle is from Jim Collins book Good to Great, he tells a story of the fox trying to catch a hedgehog.
The fox has many different strategies and tries all sorts of tricks. The hedgehog has one defence; he rolls up in a ball.
Translating this lesson to business Jim’s research showed that good firms who become great focus on one thing. In your business focus on what you love and you will be a happy hedgehog.
Me, I love the numbers of business. Not just the profit or the tax I help save but the really important numbers that drive the business.
The idea is that roughly 80% of the effects come from 20% of the causes.
This is backed up in all areas of life but in your business, the chances are that:
- 80% of your profit comes from 20% of customers
- 80% of your complaints come from 20% of your customers
- 80% of your sales come from 20% of your products
- 80% of your sales are made by 20% of your sales staff
You can improve your business by focussing on what makes the difference.
The question is how much of your day do you spend on dealing with the 80% that only return you 20%? With this mindset outsourcing your bookkeeping or using new technology like Xero which can do most of the work for you makes sense.
For a free demo of Xero give me a call and I’ll send you a video.
There is a new form of marketing called “Inbound Marketing”; this is where you get people coming to you.
The idea is that you use the Internet to win new business. This includes your Website with Search Engine Optimisation (SEO) and Pay-Per-Click (PPC) advertising as well as Social Media. You can even link your Website to offline marketing. A good example is QR codes.
Now, most of my new business comes from recommendations which I actively stimulate with advance tax planning, high levels of customer service and proactive accounting. But, I do not want to just rely on one marketing tactics, so I am starting to embrace Inbound Marketing.
If all goes well I will be rolling Inbound Marketing into the Growth Pillar of the OnTrack Business Development Programme.
