This article is the first article of our content series
How To Build A Better Bookkeeping Series: The Journey of Continuous Improvement.
Running a bookkeeping business is HARD!
In today’s fast paced, technology driven landscape, competition is rife and there is an ever-increasing price pressure on bookkeeping services.
I see the low hourly or fixed rates that are still too often being charged.
I know that many bookkeepers must be working an extraordinary number of hours to make a living – I know I did, before I figured it out.
So how do you not only survive, but also thrive and achieve your goals in a world where it seems everything is against you?
Technical skill is simply not enough.
The accounting revolution
As I have always called it.
That moment when cloud technology and apps hit us like a ton of magical bricks, changing our lives forever, was a huge opportunity for bookkeepers, and it has also resulted in more challenges than we experienced before.
The opportunities created have been numerous, remote working, real-time bookkeeping, time-saving apps, more connection with our clients, fabulous reporting tools, the opportunity to become the business advisor.
The challenges are perhaps harder to spot unless you’re in the thick of it, new technology to learn every day, clients expecting more from you, moving out of your comfort zone and into that advisory space.
One of the biggest challenges is competition – with cloud-based technology your competitors are no longer other, local, bookkeeping firms but bookkeepers from all over the world, often quoting much lower rates than you want to charge.
Huge accounting firms jumped on the bandwagon, vying for your customers for the first time ever.
The latest is that the cloud software that we so love, that we have recommended and re-sold, has become a competitor, offering cheap bookkeeping directly to your clients.
It’s not just about technical skill anymore
To do well in the bookkeeping world these days you need to be a people person, you need to be great at marketing, you need to be technologically brilliant, you need to understand how to price and you need to understand how to deliver.
You need to be able to produce financial reports, advise businesses on how to grow and improve profits and cash flow.
You need to be a great listener, have well developed counselling skills and be prepared to have difficult, challenging conversations.
It’s a brave new world and it is daunting, and it can be confusing and nerve-wracking.
So how can I possibly have a great bookkeeping business?
During my 14 years running my own bookkeeping business I learned a lot, about more things than I ever thought I possibly would! Things that I would never have considered relevant to the job I had decided to do.
And there is one thing that now I look back, I wish I’d understood a whole lot earlier.
It is a journey of continuous improvement.
The key to success is not to concentrate on becoming awesome at one thing at a time. The key to success is to continually improve each area of your business at a rate that complements your progress in the other areas.
Critical success factors
I have identified the four critical success factors that enabled me to finally start to enjoy my business, provide the service that I wanted to provide, to the clients I wanted to work with and to make the money I deserved to make as a result of my efforts.
Simply put, these are:
- Customer Service
Each factor is multi-faceted, and can make or break or you.
Excelling in one or two areas might keep you afloat for a while but if the other two are not developed quickly to be level with your skill or achievements, you will struggle, and ultimately fail to reach your desired results.
I want to help you to get better prices, employ awesome methods of delivery, provide the best customer service in the industry and build so much confidence that you will walk into every meeting you ever had with the absolute certainty that you will get the results that you want.
The importance of balance
What happens if your customer service is poor?
You cannot put up your prices as they have no reason to stay
What happens if your price is too low?
You do not have time to provide excellent customer service because you have too many clients and you are working too many hours.
What happens if your delivery method is complicated, or clunky?
You will work too hard to provide your product, meaning you don’t have time for great customer service and you are less profitable
What happens if you lack confidence?
You risk being bullied by your clients, or working too hard for too little money, or your client may find it hard to trust your advice
Having one or more of these critical factors too far out of balance with the others means your life will be HARD.
Once you get everything operating at a level that is working you can then increase your proficiency in all areas, together, so that they complement each other and add value and authenticity to your business.
- A premium practice will charge higher prices, provide excellent customer service, streamlined, timely and efficient delivery processes, provide many value-added services and confidently help and advise clients. They know their stuff, and they know it.
- A mid-level practice will charge mid-range prices for satisfactory customer service and sufficient delivery methods; they will provide the service and are less likely to give any business advice, although they will provide basic reports.
- A low-end practice will charge cheap rates, customer service will be unimportant and their delivery methods are likely to be outdated and/or basic. There will be no reporting and no business advice.
All of the above have a target market and there is nothing wrong with any of these models, provided it is what you are aiming for.
But it will not work if you mix it up – a practice charging premium rates but delivering no value-added services is at risk from the low-level practice targeting their clients.
A practice charging low-end rates, and delivering exceptional value–added services, risks going out of business, not being able to afford the right team, or the business owner will burn out!
Get your copy of ‘How to build a successful bookkeeping business’ (Co-written with Mark Wickersham), for the cost of postage only.