TFYW #022 Proven Ways To Start Offering Advisory Services

Feb 10, 2023

Today let’s get into the ‘risk’ preventing you from offering advisory services.

There is a damaging idea that accountants are risk-averse. We get labelled that we like to play by it safe and avoid uncertainty.

This mindset prevents us from offering advisory services.

I know I became a CPA because it was safe and stable. I knew that there would always be taxes, so there would always be a demand for accountants. This certainty convinced me in part to become a CPA.

My education and training emphasized conservatism and professional skepticism. We prepared estimates and projections with a conservative approach – i.e. using historical or reasonable data.


Adjusting Our Mindset

I have advised many clients that historical performance is the best predictor of future performance.

HOWEVER, while I ran my firm, the clients that grew the fastest were constantly changing. Their prior year’s performance was no indication of their current year’s performance.

They did not rely on past performance to decide how they would run their business moving forward.

At one point, I urged my client above to be ‘practical’ and ‘reasonable’ with his assumptions. It was only after two years of triple-digit growth that something clicked for me.

As accountants, it is easy to fall into the trap of expecting the same results as the prior year.

It is safe.

It’s historical.

It’s reasonable.

This ‘reasonability’ is good for audit and tax. It’s terrible for advisory.

‘Reasonability’ can prevent us from helping to create a blueprint for our client’s growth. Just because certain revenue levels haven’t been hit before, that doesn’t mean it won’t happen this year.

Being a good advisor includes two parts:

  1. Your client needs to want to grow; AND
  2. You, as the advisor, need to be confident

I am not saying you lack confidence overall, but we need a system that gives you the confidence to advise your clients better.

Confidence stems from advising with data. It is creating a plan founded on current capabilities and achievable goals.

We ensure clients understand where they are and where they can go based on external and internal data-driven potential.


Adjusting Our Role

I had a client I was doing monthly bookkeeping and tax prep for.

After two years of working with her, a new charge appeared in her credit card transactions. Like a good snoop accountant, I googled the company.

My client was using a profit planning coach.

I felt some weird emotions.

I was confused and angry at first.

Then I felt embarrassed.

Why was my client going to a coach for financial training?

Why hadn’t my client asked me for help?

Why hadn’t I offered solutions for my client?

From there, my mindset shifted. I didn’t want to only be a transactional service provider. I wanted to be a trusted partner and add value for my clients.

Plus, my client was paying her coach $1,600/month, which was 3x more than what she was paying me for a lot more work.

The craziest part was that her coach wasn’t using my client’s financial data. The coach’s guidance was purely generic and not rooted in actual results.

In some cases, business coaches are eating our lunch when it comes to providing advisory services for clients.

They just don’t call them advisory services; they call them:

  • Growth Hacking
  • Profit planning
  • 2X’ing Your Business
(If you service SMBs, ‘advisory’ is a meaningless term that your client cannot identify with.)


Most of these coaches advise on general principles that can help many small businesses. However, general advice only helps to a certain level.

We base actionable advice on operational capabilities, which are detailed in the business’s financial results.

As trusted accountants, we are already uniquely positioned to be trusted advisors and offer impactful services.


Adjusting Our Services

So, how do we offer advisory services?

If you don’t remember anything else from this week’s newsletter, remember this:


The success of your client accepting advisory services depends on your approach to introducing the services and communicating the value.

First, advisory services are sold differently than tax and compliance services. We cannot leverage the ‘need’ for advisory. For most businesses, tax and bookkeeping are a need. Advisory or growth advice is a luxury and usually not yet in the business’s budget.

We need to show the impact of how advisory services can help them with their goals.

Second, learning your client’s goals is imperative. If you build a scenario for triple growth, but the client wants to exit their business, you’ve missed the mark.

We need to tie the goals to actions.

Finally, discovering the metrics that drive profitability actions is the starting point for planning.

The metrics create the path to break down larger goals, like increasing profitability by 10% or whatever it may be. If you focus on the key metrics that drive profitability, everything else becomes a numbers game.

Fundamental metrics have to focus on customer acquisition and fulfilment.

Customer acquisition: Where are the clients coming from, and how much does a new client cost?

Fulfilment: How is the product created or the service provided? What are the key inputs (costs) to complete the product or service?

A deep dive into these two metrics will be the start to providing genuinely powerful advice for your clients.

This is where your confidence can shine.

You only need to know some things about an industry. Thoughtful questions and trackable metrics rooted in actual results will lead to transformational advice.

Build The Firm You Want!


P.S. Email with something that you want me to talk about. I’ll add it to the list. 

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