You know the problem with this time of year? We’re exhausted, burned out and need a break. And most of us finally take a few days off post 4/15. It’s great, right? Just one problem. When you make your money from selling time – taking time off has a cost. Trading time for money is a trap – like having a job. You don’t make money unless you are working. If you take time off, you don’t earn income. In the end, you may find yourself feeling like you just can’t afford to lose that much money.
However, in our industry, it’s difficult to break out of this trap. The truth is, if you really want to get more time for the things you love (and even some of the things you don’t love: like marketing for great clients) you have to change your business model to be able to scale your growth and income.
Here are three ways to escape the trading time for money trap:
1. Find a more leveraged business pricing model. Instead of charging based on the time it takes to complete a job, set your prices based on your intellectual capital. Easier said than done (more on that later). But when you implement value pricing in your firm, you make money whether you are working or not. AND besides, we all know that it may have only taken you a few hours to prepare that return, but it took YEARS of experience to be able to do it that quickly, right?
2. Charge More – Each year I scour the popular tax income and fees survey reports, and I’m always astonished to discover the low “average fees” reported in the surveys. $330 for a 1040 and $783 for a business return? Come-on! How many of these returns do you have to do to make a decent living? And even if you charge a tad more than the national average, do the math and figure out how many clients you need to get the financial freedom you want in your business. If you aren’t charging enough then either you have confidence issues or a limited perception of what’s possible. Either way, before you can adopt a pricing strategy that works, you’ll need to confront the limiting beliefs and approach that are holding you back.
3. Bundling Services You Give Away – How many of those “quick calls” do you not charge for in a given week? I’ve met tax professionals who could have retired on the amount of unbilled time in their career. Yet for some reason, we’d rather avoid sending a bill for valuable work we provide. I’ve found that converting my clients to monthly retainer arrangements helps ensure I get paid for all the places my business loses money, and they appreciate the simple pricing. Too often clients are afraid to call their advisors because of the hourly fees. As a result, it’s too late by the time we learn of their situations and they never end up getting the attention they need. When you work with a bundle, people feel comfortable calling us and we can make changes that benefit them from a tax perspective.