3 Ways to Increase Your Profits

If you’re looking to increase your profits, here are two common and one not-so-common but highly effective way to do it.

1. Increase your price or change your pricing method

Many of you feel you need to compete on price but it’s not as necessary as you might think. If you personally don’t own the cheapest house on your block, wear the cheapest shirt you can buy, or go to the cheapest doctor you can find, you’ll know what I mean.

People will pay for what they perceive is valuable; the problem is accountants are not always the best at convincing their clients of their true value. Once you build your pricing and selling skills, you’ll be able to get more for your services.

You can also change the way you price. Lots of folks have moved from hourly to fixed pricing, especially with monthly bookkeeping clients. Fixed pricing is easier to sell and can be more profitable if you have good estimating skills.

Value pricing, done right, requires an extremely high level of selling, negotiation, and communication skills. Not too many accountants are value pricing in the true sense of the word; however many are getting nice high margins on their fixed pricing, and that’s good too.

2. Increase volume

Getting more clients is a goal of many of you on this list. And the most frequent type of client you want is the monthly small business client that wants ongoing accounting or controller-level advice and produces a nice steady revenue source year-round so you don’t have to fret so much about your cash flow.

Getting more clients is best done using sustainable, low-cost, modern marketing methods, and this requires new marketing skills. Even if you used to be pretty good at marketing, the marketing world and its results has changed, even in the last few years. Once you get the right marketing skills, getting clients is a piece of cake.

3. Improve systems and procedures

The not-so-common way to increase profits is to improve your internal systems and procedures. This requires discipline and structure as well as a bunch of time. That’s why most entrepreneurs don’t do it and get stuck at a low revenue level. The big revelation for me was that only when I documented could I then see the weaknesses and improve my processes. You can’t improve what you don’t document and measure.

The skills for this type of improvement include project management, documentation, delegation, and process improvement, not to mention a healthy dose of mindset.

I Choose Door Number __

Which one do you prefer to focus on when growing your profits? Choose, then take a look at the requisite skills you need and decide if you need to increase your skill in that area. Once you get training, you’ll reach your goals easily.

You have tons of skills already: tax knowledge, accounting savvy, QuickBooks or another software or two, technology smarts, controller skills like budgeting and cash management, perhaps auditing, and so many more.

To run your business better – and to make a huge impact on your bottom line – the three skills to build the most are:

  • Time management – sorely needed and highly underestimated for the potential impact on profits
  • Marketing, including pricing, selling, and negotiation skills
  • Practice management, including developing those process and procedures and systems

As you fulfill your CPE and/or build out your training plan for the next year, consider adding some of these entrepreneurial skills to your mix. And if we can help you, please feel free to reach out.