Now that busy season is mercifully over, it’s time to start thinking of ways to leverage your expertise beyond grinding out tax returns. Clients pay you to help them make better financial decisions and to get more out of the life they’ve worked so hard to build. Chances are you’re the most trusted advisor for the vast majority of clients. Why not be paid appropriately for all the value you deliver?
Most accountants and tax pros spend too much of their time on low-skill, low-leverage activities such as tax prep (see lower left quadrant below). I want you to think about ways to move out of the lower left quadrant (low skill/low leverage) and migrate over to the upper right quadrant (high skill/high leverage).
No, $10,000 per hour work is not about aggressively overcharging clients. It’s about identifying your highest-leverage activities and committing a small amount of time to them each day to get a maximum multiplier effect on that work. If you have three minutes free, see my article The 64/4 rule.
I know what you’re thinking. I can’t get away with charging $1,000 per hour, much less $10,000 per hour. Why is that? Because a lot of the things you’re billing for are not necessarily high skill. Completing a tax return or preparing financial statements are not things you need to be able to do. But if you’re helping clients through a complex merger, the numbers get a lot bigger and you’re at your highest skill point. The challenge is that you’re billing the same hourly rate for complex merger work that you bill for routine tax prep work. Stop doing that!
Below your pay grade
What’s $10-per-hour work? Busy work. For instance, sending clients links to their shared files, scheduling meetings with them, scanning documents, making copies, or following up with clients to get routine documents, etc. Sure, it feels good to get those tasks completed swiftly and efficiently. But you can hire someone with minimal training at minimum wage — such as a new client service associate — to take that work off your hands and probably do it better than you can.
I realize admins cost money and sometimes you have to roll up your sleeves to get things done in the early years of your firm. But it’s a game of numbers. You want to free yourself up to do more high-margin work and you need to focus on leverage. It’s especially true if you’re no longer a startup firm.
Again, I understand the psychological satisfaction of getting things done and crossing them off the list. But when you say yes to low-margin work, you’re saying no to high-margin work.
Here’s how to break out of the low-margin trap: Over the course of one week, keep a log of everything you do each and every hour of the work day. At the end of the week, tally up all the low-margin activities you’re still spending time on and delegate them ASAP! Look at how much time you’ve just freed up to focus on higher-margin work.
What do you really do better than anyone else?
If you can’t think of anything that you’re especially good at or highly knowledgeable about — say, a certain industry or type of client — I would find something soon. That’s what is going to protect you in the future. Here are two good ways for moving that knowledge up the value chain:
1. Create a brief training video. This should walk the entire firm through the three financial hot buttons facing, say, manufacturing companies today. If you spend three minutes recording the video and 25 people at your firm can watch it over and over again, that’s an example of high skill and high leverage. See my recent article about recording simple videos.
2. Address an issue that your top 30 clients all have in common. Is it handling the new tax laws, or dealing with new capital gains changes, or handling new rules about Paycheck Protection Program loans? Whatever it is, do a webinar about it. Invite your best clients. Ask them each to invite a guest. Record the webinar and make it available on demand for your best clients who couldn’t attend the live webinar. Even better, send that webinar to an outside writer and have the writer craft an article about it.
That’s how you create $10,000-per-hour work!
With the training video, you’re leveraging the value you can provide to clients, and moving it across your firm so they can increase their value as well.
With the webinar, you’ll get in front of your best clients — either live or via recording — and you’ll be able to follow up that webinar with a professional bylined article that reinforces the points you made on the recording. Even better, the archived webinar and related article will live forever on your website, blog and social media platforms. That way they will keep generating traffic and leads and showcase your expertise indefinitely.
Again, review the matrix above. Get rid of the things that matter the least (in the lower left quadrant) so you are freed up to spend your time on the things that matter the most (upper right quadrant).
I’d love to hear examples of your $10,000-per-hour work or about the challenges you’re having of finding $10,000-per-hour work you can provide.