From the January 2012 Issue.
In coaching and speaking, I often have to convince tax and accounting firm owners that they are entrepreneurs. They are creators of new things and value-adders. They make the world a better place for their customers, their families and themselves. This is a high calling, and if it is embraced, it can change lives.
Tax and accounting firm owners are business owners, and are thus, entrepreneurs. This is not a feeling you have, but a fact. It doesn’t depend on the day you are having. If you are a business owner, then you are a creator. Entrepreneurs create at their core. If I can convince you of this fact, then change can begin to take place. Wrong thinking is the barrier to change. And since I am The Change Agent, I have to first address how you think ... and, ultimately, what you believe.
What change am I talking about, you might ask? This year, I want to help you change the way you think about yourself, your customers and the world around you. And I want the result to be a better world for your work — a world where you wake up to go to work. I want to convince you that your customers are suffering from a lack of insight and knowledge. I want to convince you that there are things you are not telling your customers. They need you to change their lives with your wisdom. When we pursuit these things, then the world will be a better place. Now, let me turn to how our entrepreneurial pursuits can be manifested in our profits.
The Noble Pursuit of Profit
Is the pursuit of profit noble? It is! In his paper, “The Soul of Silicon,” George Gilder states: “The moral core of capitalism is the essential altruism of enterprise ... in voluntary capital exchanges, both participants emerge better off than they were earlier, or else they would not have willingly made the exchange.” Though often falsely viewed from the viewpoint of “I take, you give,” profits created within your enterprise are actually a result of giving a higher value to your customers than they have actually paid you in cash. When you are outward-focused on your customer (altruism), your customer will prosper and your profits will rise. What do your profits then allow you to do? Repeat the process, of course. Hopefully, in a larger sense, for more customers. The more you give your customers what they want and need, the higher your profits should grow. The higher your profits grow, the greater good you can do for the world. And the cycle repeats itself.
But for the professional who does not truly believe they have value, the cycle noted above is a foreign concept. Even now, you may be wondering why you do not see this in your own firm. Where are your profits? I believe our profession has allowed itself to be relegated to a commodity state. That is, we are professionals who look the same, act the same and offer the same things to the world. Thus, we must charge similar fees. Inadvertently, we have kept our fees down by believing the value we can bring to our customers is very similar to what our neighbors do. Sadly, this is probably true. But it does not have to be!
Let’s change our “low-fee” mentality by embracing these entrepreneurial beliefs:
1. Higher prices and greater value should always go together.
Demonstrate the altruism in your profit by delivering some serious value to your customer. This will force you to move beyond only preparing tax returns, accounting, audits and payroll services. These are commodities (though not bad, they are still commodities). When you move to become a Trusted Business Advisor, a Consultant and a Coach to your customers, then you will be able to change their lives. And changing lives comes with higher prices. Higher prices sufficiently differentiate you from your neighbors. Warning: You won’t be able to do it unless you offer higher value at the same time.
2. Higher prices help your customers to buy in earlier.
To deliver value to your customers, you need them to believe in you. Do you have customers that do NOT believe in you? They must go! Believers will follow you where you lead. When you separate your customers’ cash from their wallet, then you have performed an intimate service by getting them to buy in to your abilities. When they release their cash, they are then sufficiently vetted to become believers, not just customers. The sooner you can separate the cash from the customer, the sooner you will receive the buy-in you need to start changing their lives. None of this intimacy exists when you simply sell commodities.
3. Higher prices make you a better professional.
Do you feel more obligated to that customer who is paying you a high fee? Do you return their call more quickly? You do, because their cash has assisted you in offering better value. You become better when your customer has bought in to what you are selling. And the customer has demonstrated they have bought in with their checkbook. If you want to add real value to what you offer your customers, price what you do higher and test the theory to see the results. When your customers pay you a higher price, you will begin to truly appreciate their confidence in your services. You will become more thankful for them, and you will return that gratitude with amazing service.
Talking about profit is taboo. But it’s time to bring it out into the light and let the world know that profit makes us all better. Some think profit equals greed. But greed is the epitome of self-serving individuals, not the altruism of profit as discussed here. Greed equates to taking and keeping, but entrepreneurs create and give. And we can’t give unless we have something to give. We cannot give our time when our profits are razor thin. We cannot be innovative when we have to finish all of those $200 tax returns. When you run tight margins in your firm, pruning your profit with commodities, it only makes you anxious. Anxious people can NOT be creative people. And your customers need you to be creative to bring real value to their lives. What do your customers need in this New Year that you are not offering? Entrepreneurs will address these questions with their customers and price the customer sufficiently to bring good to all involved.
In 2012, you are an entrepreneur.