💥 Top 5 reasons clients hire an advisor

PLUS: How to train your staff to handle compliance tasks and the five stages of a million dollar firm.

Hey there 👋,

In today's email, here are some tips to help you escape the accountant’s trap.

💥The top 5 reasons clients hire an advisor
💥The cash flow driver of the week
💥Train your staff to handle compliance tasks
💥The 5 stages of a million-dollar firm
💥The sticker of the week

What’s the accountant’s trap?
You're in the trap if the only way to get paid more is to work more hours or take on more low-value and high-demanding clients.

At the same time…
You can't raise your fees because there's always a competitor willing to do the same work for less.

THE TOP 5 REASONS CLIENTS HIRE AN ADVISOR

We recently asked over 350 outsourced CFOs and business advisors why they got hired.

Here’s the top five reasons:

Most business owners want someone in their life that can help them have a better future…not just someone that can help them track the past.

You see, business owners will hire their business advisor if (and only if) there’s an emotional connection. Not a logical connection.

This is why it’s important to connect with prospects on a relational level long before you connect on a logical level.

👉The Bottom Line

Business owners want someone in their life that (a) they can trust, to (b) guide them on (c) having a growing and successful business.

Check out the full report where we asked over 350 accounting professionals questions to get insights into CFO/Advisory trends.

CASH FLOW DRIVER OF THE WEEK

The #1 Job of a CFO/Advisor
☝️The job of a CFO/Advisor is to do one thing: help our clients have a growing and successful business.

A Successful Business is Defined As…
🔥A business that is generating positive cash flow on a consistent basis.

How to Help Your Clients Be a Success…
👊By helping them improve the ‘drivers’ of cash flow. Here’s one of them.

⚙️Driver of the Week: Conversion Rate

This is the percentage of your clients’ leads that become paying customers.

Leads measure marketing effectiveness, conversion rate, on the other hand, measures sales effectiveness.

This drives revenue because if your clients can convert more leads to paying customers it will improve revenue.

Let’s say that your HVAC client had 10 leads last week. If they were able to convert 2 of those 10 leads into a paying customer, then they have a 20% conversion rate.

So, 2 customers from 10 leads means a 20% conversion rate.

TRAIN YOUR STAFF ON COMPLIANCE SO YOU CAN FOCUS ON ADVISORY

Offering business advisory services is more lucrative than offering compliance (bookkeeping/tax). Period.

However, if you want to be a full-service firm to your client (by offering both compliance services and advisory services), you need someone on your team (other than you!) to handle the lower-margin work.

Enter our good friends at Universal Accounting.

Universal Accounting has deep experience in training professionals on how to provide bookkeeping and tax services.

If you’d like to get your team trained (or get yourself trained), Universal has three options for you:

Option #1: You become the instructor and train your team.
Option #2: They train your team for you.
Option #3: A hybrid of the first two options.

Click here to get more info.

By the way…

We recently sat down with the CEO of Universal Accounting, Roger Knecht to discuss transitioning from traditional accounting to a strategic advisor. Watch our conversation below.

THE 5 STAGES OF A MILLION DOLLAR FIRM

Most businesses - a whopping 91% - make less than $1mm in annual revenue. This means that most accounting firms make less than $1mm in annual revenue.

We believe this is because of four reasons.

Not enough cash for scaling.
Their services aren’t scalable.
Their systems aren’t scalable.
The owner doesn’t have a scaling mindset.

The keyword is scaling. In order to get to a million dollar firm you must have a practice that is scalable and you must be able to advance through the five stages of a million dollar firm.

💡Scaling = The ability to increase revenue without a substantial increase in costs.

The best way to scale your practice is to offer advisory services. You can increase revenue (because the service is more valuable) without a substantial increase in costs (because it doesn’t take up as much time to deliver as compliance or transactional work).

Once you have a practice that is scalable, ideally by adding advisory services, you’re then able to advance through the five stages needed to get to $1mm in annual revenue. Here’s the five stages:

🚀Stage 1: The Solo Stage (Your earnings = $0-$150k/year)

This is all you. You’re the technician, building the systems and servicing your clients. Your main focus here is getting leads and building a strong foundation. Once you have a steady stream of leads, you’re ready for…

🚀Stage 2: The Momentum Stage (Your earnings = $150-$300k/year)

Congratulations, you’re now the manager of a fine team. Working alongside others, you still service your clients while also mentoring and training your new hires, but your main focus is on converting leads.

🚀Stage 3: The Scaling Stage (Your earnings = $300-$500k/year)

With your team in place, and your list of clients growing, it’s time to really scale your systems. Marketing, sales, operations and administration (the four systems) not only need to work, but work in a way that they can increase revenue without substantially increasing costs. Once all your systems are scalable, you can move on to…

🚀Stage 4: The Growth Stage (Your earnings = $500-$999k/year)

Once your systems are in place, you are now ready for real growth. You’re also taking steps to remove yourself from the day-to-day operations. If your business relies entirely on you to run smoothly, then it is not scalable. You should now be an entrepreneur, with a team of managers overseeing all operations. Once you’re removed from operations, you’re finally ready for…

🚀Stage 5: The Breakthrough Stage (Your earnings > $1mm/year)

With the right systems and team in place, your business should be like a machine. You have managers to manage your managers. Marketing, sales, operations and administration are all handled by your team. You get to focus on new ideas, new directions and new developments for your business. Or maybe you just sit back and enjoy the time (and money.)

👉The Bottom Line

Growing a business is difficult. Growing a scalable business even more so. To do so you need:

1. Enough cash to allow for scaling.
2. Services that are scalable.
3. Systems that are scalable.
4. A scaling mindset.

The CFO Project put together a masterclass on how to scale your practice. It’s called How to Build a Million Dollar Firm Through Advisory Services.

If you’d like to register for the masterclass, click the button below.

WANT THE STICKER OF THE WEEK?

This week’s sticker of the week!

😎Who says accountants aren’t cool? Proudly show off your coolness with our sticker of the week on your laptop, phone or fridge. How do you get the sticker? Glad you asked!

🍓Send an email to [email protected] (with the subject line Financial Mess) and let us know the juiciest financial mess you’ve seen a client get themselves into and how you got them out!

📬We’ll mail you (yes, physically mail you) our sticker of the week!

😁BTW: Please change the names to protect the innocent.

Arrr!

We ❤️ Accountants.
We ❤️ Bookkeepers.

Escaping the Accountant’s Trap newsletter is created with love by a team of accountants, marketers and business experts.

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