Don’t Let Your Client’s Financial Woes Become Your Financial Woes
Being the owner of an accounting and bookkeeping services firm, my company has a front row seat to how “well” our client’s business are doing. One particular client, made the decision to wind down operations and close the magazine he was trying to get off the ground. At the time this decision was made, there was a tremendous amount of debt on the books, investors who needed to be notified, a tax return that needed to be completed as well as some bookkeeping work to wrap up.
When the owner called me with his decision to wind down operations, he asked me if I would assist him with the accounting work that needed to be done and if I wouldn’t mind being paid after the work was completed. Red flag! My gut instinct told me to get paid up front (as I do with all of my other clients and had in the past with this particular client) but I felt sorry for the financial situation this young man was in and I agreed to let him pay me once the work was complete.
My firm went about doing the work and coordinating with the attorney in charge of winding down operations. As soon as our part was complete I received a letter in the mail from that very same attorney stating that the company was bankrupt and we would not be paid for the services we provided. Needless to say I was a little angry!
We had spent at least a two weeks preparing the information that was needed on the word of this young man that we would be paid. We also had first-hand knowledge that he received a severance package. I had made a classic mistake, I allowed my client’s financial woes to become my financial woes, and as a result my firm walked away without being paid while he did get paid. My decision placed his well-being, both financial and spiritual, above my own, and thought because I performed the services in good faith, that he would in return, act in good faith. It was a tough, expensive lesson to learn.
Since then, I make it a point to engage my prospective clients in a dialog that will provide me with clues to the financial condition of their business. For example, I’ll ask a prospective client “What impact will our service have on assisting you to grow your business?” or “What direct impact will our service have on your business and how will you measure that impact – through the acquisition of new customers, increased revenue, etc.”
I’m really curious as to what their response to those two questions will be. I like to make the questions thought provoking and open-ended because my main objective is to start a dialog, to obtain more clues obtain more clues about the financial condition of that business.
The other thing I do is ask those same questions a couple of different ways. When you ask the same question a couple of different ways and you receive different answers or inconsistent answers you will be able to string together new questions that will help you to get a better picture of what is going on.
With existing clients I make sure I have clear, concise, boundaries surrounding how and when I will be paid because once you provide the service, as you saw from my story, you are left with little recourse other than hiring an attorney or going to small claims court to obtain payment – both of which will cost you more time and money!
Deer in Headlight Syndrome
In the past, every time a prospective or existing client challenged or questioned me on my fee, I would become a deer in headlights! In my head, I would be shouting “I cannot believe that this is happening again!” and a few choice other phrases I won’t mention here.
One of the hardest and biggest lessons for me to learn and assimilate into the very core of my being has been to sell the VALUE and RESULTS that my firm provides and NOT trade dollars for hours. Once I finally got this concept, I immediately increased my annual revenue by $100,000! No lie!
I had to learn to place a value around the skills and knowledge that I have. It is so easy for me to get to the bottom of a client’s accounting and operational issues within the first hour of meeting with them. What I had forgotten was that I didn’t suddenly wake up one morning and know accounting or how to help a business run more efficiently. I had acquired this knowledge through years of education and experience AND that has VALUE. That expertise is what I am sharing with my clients, and what they are paying for.
What comes easy to you? What is it that comes to you so easily you don’t give a second thought to it? The answers to those questions are the VALUE you are providing to your clients. Most likely, it is also the part of the work that you enjoy doing the most!
Once you have determined the value you are providing to your clients, create different ways for your client to select your services. You can establish a pay-as-you-go-rate or packages and retainer fees with different levels of service such as the no frills package, basic package and deluxe package.
Give your client a choice and they will always pick your biggest package. Load it up with value like unlimited e-mail and phone calls, a monthly in-person meeting – and base the price upon what you are worth – not what you think the client will pay or can afford. You will be pleasantly surprised how many say YES when you are clear and confident about the value and results you provide.
The Dentist in Sheep’s Clothing – Grandma what Big Eyes You Have? (Part II)
Remember the Dentist in Sheep’s Clothing from my earlier blog post? Nice guy – personable, successful, busy, – knows his stuff. He tells you that you need $16,000 worth of dental work and then he rattles off all the things that are going to be included in the $16,000. He doesn’t provide you with a written document, nor does he tell you of all the things which is the most important and which can wait. You cringe because, according to him you need the work and you know that you don’t have $16,000 lying around, let alone lying around for dental work. He says, not to worry he can get you a payment plan. He then scurries you off to meet with the person at the desk who then has you fill out an application for the dollars. The receptionist schedules your next appointment and you are out the door. What just happened here, you ask!
Before you knew it you were basically railroaded into signing up for services that you don’t understand and now are responsible for not only paying back at a 24% interest rate. Guess what? The Dentist received his money and his sales goal for the month, he doesn’t care if you pay the finance company or not.
These events that I experienced of course piqued my curiosity and I asked the dentist how he arrives at the “dental plan fee”. He was quite honest with me (once he knew I wasn’t going to sign up for any of his services) and said he picks a number based on how close or far he is from his target for the month.
Some may regard his tactic as bold and aggressive. In my opinion they are unethical and out of integrity. The dentist’s main concern is how much revenue he can earn from each mouth walking through the door. He is not caring for the person.
The other thing that was obvious about the culture of the office is that each and every staff person who worked there felt the pressure of having to bring in revenue. He made sure that the hygienist scheduled the next cleaning appointment. At the desk, the receptionist not only made sure I had another appointment they wanted to know if I wanted to purchase any products.
Don’t get me wrong, I think everyone deserves to earn a good living but you don’t have to use pressure and scare tactics to make money.
Join me for my free call on Wednesday, March 10th at 7pm EST.
50% OFF CLOSE OUT SALE – The Secrets to Pricing & Packaging Your Services
It’s time for everyone to get organized for fall, and that includes me! This is a heads up about my special CLOSE-OUT SALE that is just around the corner…
Beginning THIS Friday, August 21, at 9 am Eastern, I will be holding a 50% OFF CLOSE-OUT SALE on my #1 selling product, “The Secrets to Pricing & Packaging Your Services”
To date, this product has helped hundreds of freelance bookkeepers just like you dramatically increase their long-term sales – many by thousands and tens of thousands of dollars.
Here’s why I’m doing this…
As you may know, we’ve been doing a complete “brand overhaul” here behind the scenes at SUMSOLUTIONS, and that includes redesigning all of our products for a new look and feel, and updating the content as well.
But the problem is, we have remaining 152 copies of this program on our shelves that we don’t just want to throw away.
This is a perfectly good program that I created a few years ago, and while the examples are not the most recent, this is the same model I use to price and package my
So as a compromise, I’ve decided to offer these remaining copies to you at an UNHEARD of 50% off. This program sells for $197 at full retail, so that means you will be able to get it FRIDAY for only $98.50!
Remember, the Close-Out Sale begins THIS FRIDAY, August 21 at 9 AM Eastern. Don’t miss it – this offer is only good until I sell the last of my copies!
In the meantime, you can learn more about the product here.
http://sum-priceandpackage.com (But, don’t buy it yet! The sale starts Friday.)
Even if you’re already working with your clients on retainer, you don’t want to miss this chance to add this tried and true resource to your business success library. I’ve helped hundreds of freelance bookkeepers just like you use my secrets to dramatically grow their business and smooth out their cash flow.
It has been a real pleasure working with Linda. She has helped me to see what area of my business is really my passion and focus my attention on that area.