Building a Million Dollar Firm: Q&A With Debra Kilsheimer
Debra Kilsheimer was part of “Building a Million Dollar Firm,” a Power Panel at QuickBooks® Connect 2017 moderated by Joe Woodard. Here are highlights from her part of the discussion.
1. What pricing strategies do you use?
We price weekly: $125 a week feels like a whole lot less than $500 a month. Plus, you get four extra weeks’ pay during the year.
When hiring, clients have an idea what a full-time employee would cost. Of course, we can do it in a fraction of the time and don’t need to be "there in the chair." So, take a part-time bookkeeper, accountant and CFO’s annual salaries and divide by 52. There’s a simple way to come up with a fee. The higher you go up the professional ladder, the more it costs. Clients understand weekly pricing and $1,000 a week for a CFO versus $52,000 seems doable!
And, of course, we ACH this every Monday morning – no exceptions. We tell them we can keep their costs lower that way. We don’t chase money.
2. How do you price?
Pricing is an art. You learn with every new client. Everything I learned about value pricing I learned from garage sales! What you pay has nothing to do with cost and everything with what it is worth to buy! You get very good at negotiating!
We use menu pricing. So much for this, so much for that. There is a range we have internally. Once we talk with the customer, we give the price for three options, as Ron Baker and Mark Wickersham teach.
True value pricing is figuring out what it’s worth to the client at that time. A set of books when the IRS is knocking on the door is worth more to the customer than someone who doesn’t care one way or the other if his books are correct. It’s the same set of books, but with a different value to these customers. We wanted a simple approach to do basic bookkeeping, accounting and CFO services.
3. How do you know what your services are worth to the customer?
You talk with them. Here are some of the questions we ask:
- Why did you call today?
- Why did you call us?
- If price was no object, what are the results you are looking for?
- Tell me, in your words, what you’d like us to do for you. Tell me about your last accountant. What did you like about them? What didn’t you like?
- Why did you start the business? What is your biggest joy? Pain point?
- If your business could pay you a million dollars, what would you do with the money?
This is a conversation we have. We are finding out about them. Do we like them? Can we help them? Will they fit our customer profile? People love to talk about themselves. It’s the easiest way to get people to like you! Just ask about them! Works every time.
We have never charged hourly, ever. When I worked as a CPA, I thought it was the dumbest system. Clients never know what they are paying for until after the service is done. The better I got at the work, the worse my performance review! I wasn’t billing as much as the slowest guy in the office!
I wanted to be the most expensive firm in the area. Why? People value what they pay for. Give it away and the clients don’t value it. They talk to each other too. You charge someone a low fee and his friend calls up wanting the same low fee. I didn’t want to be Walmart. I wanted to be Louis Vuitton.
Working at the higher end of the spectrum keeps the tire kickers away too. I am okay when someone says, "The firm down the street charges half what you do." My response? "We don’t take everyone. Perhaps you shouldn’t use us. If all you are after are low prices, feel free to use the cheapest guy in town. But if you are after a relationship with a firm that cares about your success, can help you when things need improving, cheer for you when you sell your business, stay on top of the all the mumbo-jumbo the government makes small business do, and keep current with all the technologies to improve your life, then we can be that for you."
4. How did you build to a million?
It really wasn’t about the million dollar threshold. That’s what happened once I defined why I do, how I am going to do it, what am I going to use, who I would do it with and where I would work. Once I knew the answers to those questions, I wrote it down, practiced the sales pitch, got the confidence to implement it and the courage to actually put it into place – then things took off.
5. What processes do you use?
QuickBooks Online for sure! What a game changer! I can do daily work if I want. I see what’s going on as often as I feel like looking at their books. No more monthly crazy time. We require certain banks. We require ACH. We are in charge of our firm – not the client. Clients do not dictate how we run our business, we do.
You must first define your "store", aka what you will and won’t do. Otherwise, you’ll go wherever the wind blows! If I opened a high-end steak house and someone walked in wanting sushi, I wouldn’t run out and hire a sushi chef or slice fish myself. I would tell them, unless you want a great steak, we can’t feed you. Why do we as accountants think the client can tell how we get their work, how they will pay, etc.? Once I decided how to run my store and let them know, there was a huge difference. I got my life back!
6. How did you get your "old" client on board with the new processes?
WIIFM! What’s in it for me (meaning them)? I called them, letting them know that as a leading accounting firm (and that’s because I said so), we were on the front end of the changing accounting landscape. I was pretty enthusiastic about it; they catch your "fire". They were so fortunate to have us because we are a "Firm of the Future." We are moving everyone to OuickBooks Online. There would be no additional cost anymore for their OuickBooks! It’s part of our service now. Now we can collaborate in real time. Because of the ability to collaborate, we are now having scheduled monthly management meetings. By the way, this monthly meeting is even at the smallest level of service. As part of the updated services, we will include training on the transition. We are excited to get started. Your start date is X. When do want to set up the training? And, that was not a yes or no question; it was a when question. They all gave me an answer! Was I nervous clients would balk? Sure! Did they? No! Then I thought to myself, companies change their services all the time and I just roll with it. Why wouldn’t my clients?
7. What makes a "good" client?
The first factor would have to be that they are one one we like. Getting clients is like dating. You see if you can work together. We look for people who aren’t out to cheat the system. They want to do things correctly. We look for people who know they don’t know accounting but want to run a business with our help. We find this out by asking questions in the initial interview. We are figuring out if we want a long-term "romance" with them.
We also don’t take industries that are more challenging. Nothing wrong with them – I just don’t want to deal with inventory or job costing. If that’s your thing – great. I wanted restaurants, small car dealers and small medical offices. Once the word got out, that is who called us.
8. How did you define your firm?
We are reliable. We answer the phone. (Amazing how many new clients we got because we actually answer the phone!) We are always pleasant and easy to talk to. We want our customers to want our services and never be afraid to talk with us. We are their partners in their success. They can tell this because we show them how much we care. We know accounting can make a difference in people’s lives.
9. Why did you do things this way?
I wanted to really enjoy my life. I wanted to be in charge and to make enough money to pay off my house, buy a vacation home, travel, and save enough for retirement – all of which we’ve achieved. I like being a leader in this profession. I think we have achieved that – all from my back bedroom office.
You don’t have to be a big firm to achieve this success. We are a two-and-a-half-person operation. My partner doesn’t even use QuickBooks at all! He only does tax returns. Our million dollar firm came from defining our process, having the courage to implement it and the belief that it would work.