Cashflow issues kill nearly 30% of businesses. It doesn't matter where you live or what line of business you’re in, this is a constant statistic that has a far-reaching impact beyond just another failed business.
Layoffs-Increased unemployment; divorce-broken homes; increased taxation- further pressure on communities to carry the burden
Cash flow issues are a big problem that is finally starting to get some light.
While I believe in fighting the good fight, today I am going to appeal to my capitalist friends in the most qualitative way I can and ask you to make a choice.
Since you need to make a decision I am willing to help facilitate this for you leveraging a process called the client decision cycle. Taught to me by Ian Howell https://www.linkedin.com/in/rocketdevelopment/
The only question that matters: Mr/Ms. CPA, "What do you need to do to move your business forward?"
I have personally and confidentially interviewed thousands of CPAs in Canada and the USA, and after 30 minutes and asking this question in 12 different ways your answers are fundamental and all the same.
- You want to make more money per client
- You want to discover new services
- You want to optimize your business process
- You want to find new clients
I am always amazed by two facts when I start this process.
- How every CPA knows what they need to do.
- How much pain a CPA can endure. The long crappy hours during tax season is somehow a badge of honor to CPAs as cauliflower ear is to a wrestler. I think I am tough, but I will not endure 14-hour days for months away from my family.
Please note, when I am told by a young CPA their war stories of hours on a file times thousands it doesn't earn my respect. Maybe some sympathy.
I digress, what is really keeping you up at night is the reality that you know compliance can't get you where you need to go in terms of income
So let us take a moment to reset compliance work to where it belongs, it is the lowest bar for service. Recording and reporting on the past is the bare minimum threshold skillset required to call yourself a CPA. The last 40 years of employment, people could make a good life working in this industry while moving from paper to spreadsheets to software. The problem is that technology has become so advanced and the compliance model has not adapted. Sorry GenX, Xennials, and millennials you have to live in the now and future for the next 10-30 years.
Example: Why are you billing hourly?
You say you want to make more money per client but you charge for the hours worked on a file. The fact is I can show you technologies that can get the job you do in 8 hours now done in minutes with fewer mistakes. This will not get you to your goal.
You go to a conference every September-December collecting CPD credits watching presentations about new techniques and tools then you lock yourself away in "Tax Hell" between January and July telling everyone you're too busy to do something new and professionally enriching. Take a vacation in August and repeat the conference/tax hell cycle year after year.
You want to become efficient, but really that just means finding a way to do more of the same work for the same fee at the end of the day as you charge for time.
Here is the one that hurts. You want to attract new clients to sell them services you are comfortable performing they don't care about. Nope, they could care less about your 18-month-old year ends, the papers you produce, and the graphics you've laboriously created. When it comes to compliance, they have one number they need to know...'What do I owe the government?' The Rest? it is you trying to justify the value of the bill you are sliding across the table.
I can go on for days, but here is the truth. All the firms I spoke to are quietly crying to themselves because YOY growth of their business is between -5% and +5%. There was a direct correlation to the age of the owner. Owners between 60-65 were generally declining, while 35-45-year-olds were on a modest growth curve. My hypothesis is people generally attract people similar to themselves. the 62-year-old CPA has a bunch of 62-year-old business friends for clients who are retiring, dying, or transitioning the business to their kids.
Back to the only question that matters: "What do you need to do to move your business forward?"