4 Stages To Become VITAL

The Four Stages of Becoming VITAL

In this article, I will be talking about how to position yourself as being VITAL. If you are not already considered VITAL by your clients, I will be sharing some ideas about what you will need to do.?

You will hear me talk about two kinds of business models.??

The first model is The Monster Business.? It is run by OCD accountants. An OCD accountant is overworked, compliance-based, and demoralized. (Hence the OCD acronym.)?

The second model is The Freedom Practice. It is run by VITAL Advisors. They are highly valued and highly paid, attract better clients, and have more freedom in their lives.? Unlike the OCD Accountants, the VITAL Advisors are crushing it in regards to making an impact and building wealth for themselves and their clients… Some companies are VITAL.

Others–not so much.

In the 1940s, Joseph Juran coined the term “The Vital Few and Trivial Many”.? This term came about after Juran continued the work on the 80/20 rule originally brought to us by Pareto…

Pareto observed that 80% of Italian property was owned by 20% of the Italian population.

This principle can also be applied to the fact that 80% of your income comes from 20% of your high-value clients.

The principle applies everywhere. You will also see that 20% of your time produces 80% of your results, and so on.

This rule can be an incredible tool for growing the revenue of your Accounting/CPA firm.

What you need to do is figure out which 20% of your activities will produce 80% of the results you want.

Likewise, by identifying which 20% of your clients represent 80% of your revenue, you can go out and find more clients like them; dramatically growing your revenue and profits.

Higher revenue + plus fewer clients=freedom.

A nice idea, but how easy is this to achieve?

Well, we know that the 80/20 rule can be applied to pretty much everything in life. That means that 20% of accountants are perceived as VITAL. The other 80%, unfortunately, aren’t…

Let me now share with you the good news:

In 2017, I carried out a survey of the accounting profession. After spending 2 years analyzing the results, and speaking with hundreds of accountants from around the world, I have determined 5 distinct characteristics that make a VITAL Advisor.?

These characteristics are:

• Valued. Considered to be important or beneficial; cherished.
• Impactful.? Having a major impact or effect on the businesses they work with.
• Trusted.? Regarded as reliable or truthful. Sought out to help the businesses they work with.? A person who falls into this category is what we call The Trusted Advisor.
• Agile.? Able to move quickly and easily, and adapt to the changes that are happening at a rapid rate.? These changes happen by both the month and the year.
• Lucrative.? Producing a great deal of profit for their clients, and subsequently making a great deal of profit for their practice.

VITAL—If you google this word, it will be described as “absolutely necessary; essential”.

Let's dive in and talk about how you are going to become VITAL.

Well, quite simply, you must offer a better service to your clients. A service that your clients deem essential. This service is an advisory/CFO service.?

Here is why this is so important: The adage "people buy what they want, not what they need" is particularly relevant in the context of an accounting firm expanding its offerings from mere compliance to business advisory services.

This shift highlights a fundamental understanding of customer psychology and market demand.

Compliance services, while necessary, are often viewed by businesses as obligatory and uninspiring.

They are the needs;? the essentials without which a business cannot operate legally. However, they do not stimulate growth or innovation, nor do they offer a competitive edge.?

In contrast, business advisory services represent the wants.

These services cater to a business' aspirations, by offering strategies for growth, both in revenue and profit.

They address the ambitions of business owners by aligning with their desires to innovate, expand, and succeed at a higher level.

When you offer business advisory services, you tap into what a client truly wants.? A business owner is actively looking for help in growing the business.

They want success. Sadly, compliance does not address this.??

Offering advisory services capitalizes on the excitement and potential of achieving greater success for your clients.?

The value of success massively outweighs the mundane necessity of compliance. Being seen as a higher value to your clients translates into a higher revenue for you.?

Moreover, this transition from compliance to business advisory signifies a move from a reactive to a proactive service.

While compliance reacts to existing regulations, business advisory anticipates future challenges and opportunities.?

A business advisor can offer tailored, forward-thinking solutions.? Again, what a business owner wants.?

The lesson here is to sell what people want, not what people need. People will pay more for what they want.

The journey to becoming a VITAL Advisor/CFO is a progression through four distinct stages.?

Each one of these stages has its own set of strategies, client relationships, and business focus. Understanding this enables you to strategically evolve your offerings and market position.

The journey starts with most firm owners in OBSCURITY: This first stage is where you are selling a basic compliance service to pretty much everyone you can.

At this stage, you are working with any client who comes your way, regardless of fit or specialization.

The focus here is getting more clients.? It’s about volume over value, which leads to a wide range of services being offered. Your main competitive edge is selling on price.

If you are at this stage, you are struggling to establish a market presence and a distinct identity. As I have mentioned before, you are competing primarily on cost and have no differentiation in the marketplace.?

This is where so many of my new clients come to me. They are pretty frustrated and exist in the realm of OCD—overworked, compliance-based, and demoralized.?

Let’s move on to the next stage. This is where an accountant and their firm might be seen as VISIBLE: The second stage is marked by a slight shift towards specialization.

This is where the concept of a 'Hunting Niche?' comes into play. Maybe you have started to identify and target a specific segment of a market, although you continue to offer a broad range of compliance services.

This increased focus begins to build your reputation in a specific industry, which leads to reduced price sensitivity.?

This is because you are now seen as more knowledgeable or skilled in this particular niche, compared to when you were a generalist.

However, at this stage, you are still a traditional accountant and are probably still struggling with OCD.?

The third stage is more pronounced. This is where you are seen as VALUED. Now you offer niche-specific solutions, focusing exclusively on one type of client.

If you are valued, your clients believe you understand them, their needs, and the challenges they face.? They want your help, so they call you up.??

A sad side effect is that, while the client might now start to get advisory services from you, behind the scenes you are often giving it away or charging a very minimal fee. You are still probably only getting paid pennies for your work.?

Additionally, you are watching your clients pay a business coach for support that you could give them yourself, or you are already giving them for free.

They do value you, but the advisory is not productized and is ad hoc, so you are not getting paid handsomely for the work.? It is still transactional, and not transformational.?

But then we can move on to VITAL: The final stage is where you become a vital, almost indispensable, part of your clients' success.

You are recognized as a? Specialist Advisor/Coach. You have a deep and nuanced understanding of your clients’ fears, frustrations, wants, and aspirations.

Your services are highly sought after. They command higher revenue, and you are able to work with fewer clients.

This is because the quality and impact of your work are so significant that you get paid more, paid more often, and keep clients longer. You end up being able to step off the feast/famine rollercoaster and enjoy stability.?

The opportunity to become wildly wealthy is within your grasp. At this stage, you are not a service provider, but a VITAL Advisor.??

In summary, the journey from obscurity to VITAL involves a strategic narrowing of focus. You are moving from a generalist to a specialist.

This journey is marked by a gradual shift. You begin by competing on price with a menu of services. You will move on to ad hoc advisory.

Then you will reach the stage where you are competing on value and expertise with a productized transformational offer, which will lead to a position where you are not just valued, but considered vital by your clients.

Remember that VITAL stands for Valued, Impactful, Trusted, Agile, and Lucrative.?

I don’t know one accountant on this planet who wouldn’t deep down want to be VITAL to their clients. A VITAL Advisor has all the luck:

• You attract the best opportunities.
• You hire the best staff.
• You get the best clients.
• You make the most money.
• You win all the awards.
• You have all the fun.

If you want to be VITAL,? it is your job to make it happen.

For more content like this check out the Business Advisor Podcast where I talk about creating, selling, and delivering a business advisory offering to add 500k to your revenue with client delivery less than 10 hours a week.