How I Increased my Revenue by $100k Without Taking on New Clients
I recently increased the revenue for my bookkeeping practice by $100k…….without taking on any new clients.
In fact, I actually reduced the number of clients I was working with. I did this by doing 4 things:
1. I increased my monthly minimum fee
I decided that I was not going to keep any clients that were worth less than $500 per month in revenue. If they were good clients, but just low value, I gave them the option to stay on but at a new monthly minimum fee.
Yes, I knew the risk was some might leave, but I was okay with that. As it turned out, most of them valued our services so much, they were happy to pay the extra.
2. I conducted a review of all my clients
As I have mentioned in previous posts, not all clients are good clients. And…some clients may have been great when you were starting out, but as you have evolved, maybe the fit is no longer right.
After reviewing all of my clients, there were a handful that had dropped down to being classified as D-Class Clients (you may want to read my previous post on how to spot a D-Class Client). The few that were difficult to work with, rude to my team, did not take our advice and expertise on board or were not what we classified as “compliant”, these clients are just time wasters. I was more than happy to just politely let them go to free up time for those higher value clients that we actually wanted to work with.
3. I did a full scope review for every single client
Now I know I keep going on about scope creep (see previous posts), but I seriously believe this to be one of the biggest problems that Bookkeeping and Accounting Firms are dealing with right now, especially with the shift to Fixed Fee services.
I am a BIG fan of Fixed Fees services, but if you are not doing a scope review at least twice a year, then you are at risk of seeing a decrease in profits. I have to admit, I was a little behind on scope reviews due to the crazy past 12 months with Covid-19. I was shocked at how much extra work we were doing for some of our clients since my last review. Business is booming in WA and many of our clients are growing rapidly, this means more work, increased transactions, larger payrolls and a requirement for more support from us as advisors. I immediately contacted the clients and advised them of their new fees. I had no push back at all!
4. An overall fee increase
After 2 years of no fee increases (we held off last year with the uncertainty due to Covid), I implemented an overall fee increase for all of our services. This increase was applied to the few clients who were still on hourly billing rates, it was also applied to our Advisory Services, Training Services and Workshops.
All of this has lead to a revenue increase of $100,000 for the next 12 months, without taking on new clients to achieve it.
When was the last time you did a Fee Increase and a Scope Review?
Have you considered setting a minimum fee into your practice?
Get in touch
I have been working in the industry for over 20 years and have supported many bookkeepers along the way. If you are unsure on how to review scope and fees in your practice…..feel free to reach out for a chat!