This week I want to address how we think about how we think about selling. Yep, you read that correctly.

But first –

Today’s Tactic

Most of us know what we need to do to improve our firm.

We are not oblivious to the changes in technology or pricing strategies, but resistance exists.

In most cases, the pain of change appears greater than the pain of staying the same.

One tactic I like is asking myself, “If I were to sell my firm tomorrow, what would the new firm owner change immediately?”

With this question, we invite an objective, future perspective.

That exercise never crossed my mind until I decided to sell my firm. I committed to selling my firm in late 2020. Before I signed up to list my firm with a broker, I did some initial work to find a buyer.

I contacted three other firms I knew might be a good fit on the service delivery and tech compatibility fronts. Two said they were uninterested, but the last one entertained the idea.

I prepared a redacted list of my clients, their annual fees and services and sent it to the buyer. I included the valuation I wanted on the sale too.

The buyer came back immediately and said my client fees were too low.

He felt he would lose many of them if he raised their fees.

That feedback confirmed what I already knew but hesitated to implement.

I immediately raised my prices for a large portion of the clients and cut loose a handful of others.

My firm sold in Sept 2021 with a 17% higher valuation than I had proposed to that buyer 10 months before.

Trouble Selling

When I was 19 years old, I moved to Argentina. I travelled around the country as a Mormon Missionary for two years.

Much of what I did was go to people’s homes and ask if I could share a message about my faith.

Essentially, I sold religion door to door.

I can still see the faces of confused people staring at me as I stumbled through my approach in broken Spanish.

While I stopped practicing Mormonism half a decade ago, those two years in South America taught me a lot about myself and selling.

I learned that belief in what you are selling is the number one factor in sales. You can only convince someone to the level you are convinced yourself.

Humans can detect incongruencies. A prominent marketing mantra is that a confused mind always says no.

Confusion comes from a lack of clarity AND conviction from the seller.

In many cases, it’s our lack of conviction that becomes the barrier to the sale.

Selling Services

Selling Compliance Is Easier

Compliance is everything after a transaction or series of transactions has occurred.

You don’t have to do much to convince yourself and a client of the outcome because the options are limited. The variables and rules are set, and we just follow the process.

The ideal path is clear to see, and the outcome is known. It is easy to believe we can get the best outcome.

The outcome of a personal tax engagement is a filed personal tax return.

The outcome of bookkeeping is a clean set of financial statements.

I am not saying that the process is not difficult and that just anyone can do it. 

And I’m not saying that there are no bad tax preparers.

I’m saying that the risk for compliance is mitigated to knowing the rules and executing the process.

The better you know the rules, the less risk of delivering on compliance engagements.

Selling Advisory Is Harder.

Advisory work rarely leverages pre-defined outcomes.

It is guided by addressing business constraints:

• How much capital or access to capital does the client have?
• How much capacity (i.e. amount of time, depth of talent, or tolerance of risk) does the client have?
• What are the current and future goals the client has?
• What is the time horizon for this outcome?

While outcomes may look similar, each client needs a tailored process to reach their unique destination.

Given the variability of processes and outcomes, we are naturally less convinced that we can deliver results without rules or guidance.

The risk for advisory is extended to the process AND outcome.

Most advisory work extends beyond the accounting and financial functions of a business.

 

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

 

To succeed in compliance, you must be good at tax/accounting.

 

To succeed in advisory, you must be good at business.

 

Reduce The Risk

We can become better at selling and delivering on advisory services by reducing the risk we perceive about those services.

1. Accountability – I still remind myself of this one consistently. You are not responsible for the outcome of the advice.

You are responsible for the quality and delivery of the advice, not the application of the advice.

Just like a fitness instructor can deliver an excellent workout and meal plan, but if the client doesn’t execute the plan, the results won’t follow.

We can provide guides and tools or even perform some of the work to help apply the advice – but the client must take action.

Protip: Don’t discount the value of holding clients accountable for the plans that they have agreed to. Many business owners operate alone, and having a knowledgeable accountability partner can be all the difference.

2. Diagnosis – You have to spend time getting to know the root of the problem. We are good at creating financial statements which are results. But we need to complete the investigative work and pull on the threads in those results to find the issue.

I understand that many small business issues are very similar, but sometimes we are quick to prescribe before diagnosing.

Understanding all the variables and impacts on stakeholders (clients, vendors, + employees) must be considered.

3. Delivery – You need a framework to systemize the above two steps.

The standardized approach will support your advisory work’s tailored (and most valuable) portion.

We reduce the risk of value delivery by creating a progressively substantiated approach.

I saw this explanation of how we can create linear advice for clients:

• Where are we at?
• How did we get here?
• Where will we finish?
• What are our options?

4. Pricing – Real Impacts on business take resources. If a client wants impact, it will cost money or time. There is no way around it.

Many of us charge 1/5 or less of what we need to charge to effect real change in a business.

I’ve fallen into the trap of wanting to help clients only to undercut my value, rush my service and deliver little value.

We don’t help our clients by charging them less. We can’t deliver more value by simply lowering the price.

That’s it for this week. I honestly hope this has helped you think differently about selling advisory services.

Build The Firm You Want.

Mark