Fixed Fees and Re-thinking the Way You Charge!

Almost every Bookkeeper I speak to struggles when it comes to pricing, and many are definitely not charging their true worth!?The common areas where I see bookkeepers struggling when it comes to pricing are:?

• They under value their own worth (often due to Imposter Syndrome) – therefore working ridiculous hours for not enough income.
• They are stuck in an Hourly billing mindset and are not sure how to migrate clients to a Fixed Fee / Value Based pricing model even if they wanted to.
• They?haven't niched, are not sure how to niche, and?aren't attracting the right clients.
• They're afraid of losing clients if they charge a higher fee, or change their pricing method.?

Let’s face it?- most Bookkeepers are working crazy hours, though feel they're?earnings don't reflect this.?In fact,?some Bookkeepers?default to thinking that they may be better off returning to being an employee, though the real issue is usually that they haven't set the essential foundations to?price for profit.?

With my own business being established for 22 years, I have had a few of these experiences myself:?

• I feared I would lose clients by increasing my fees.
• I didn’t separate out Advisory Services from Bookkeeping Services.?
• I was stuck in?hourly billing for far too long.?
• I discounted way too much!?(A common occurrence for those still billing by the hour in an attempt to avoid clients freaking out over bill shock).?
• I was completely focussed on TIME.???
• I didn’t offer pricing options in my proposals.?
• I didn’t know how to communicate my value when having pricing conversations.?
• I put my pricing on my website.

Now, that last one was a big one. By publishing my pricing, I wasn't allowing any room to move when it came to proposals, or pricing jobs based on the scoped requirements. As you will know - every client is different and even if a job looks pretty simple on paper, it can soon become very apparent that there is more to it.??If you have already communicated pricing on your website, it becomes very difficult to move on this, or to try and make a potential client understand why you may need to charge them more.

So, not only was I under-valuing my services through hourly billing - I was putting it in neon flashing lights for everyone to see, and setting expectations based on price before I even had the opportunity to establish my value.

After a while, the business growth I had been seeing plateaued, and?while I thought I was investing in all the right things (more team members, more clients, more time, more, more and more) -?I couldn't move the needle past?$500,000 per annum in revenue. And while 500K per year may seem great, my profits were being eaten up by all the 'more' my Team and I were doing, and my cash flow was suffering.

I was so frustrated and stressed. I felt like a mouse on a wheel on Groundhog Day. I considered getting out of the game altogether. I had become one of those people?who thought perhaps it was time to go back to being an employee.

Though, as Einstein said...

“Insanity is doing the same thing over and over and expecting different results.”?

So, I decided to bite the bullet and completely change the way I was running my business. I had tried to do so much?more to increase revenue and profit, though I had failed to consider doing something?new?or?different.

These changes had a huge impact not only to my business…but also to my mental health!??

• I?ditched D-Class clients
• I ditched?hourly billing and moved to a Fixed Fee method of billing
• I set a minimum monthly revenue requirement for any new clients
• I removed all pricing references from my website.?
• I stopped discussing pricing with prospective clients until I had completed a thorough Discovery Session. “Hourly” was removed from my vocabulary (in fact, if anyone phoned and asked me my rates over the phone, I?told them?that I scope each job individually and I don’t charge by the hour).
• I created fee packages and price options
• I mapped out my services and separated out my Advisory Services and started offering tiered pricing options in my proposals.
• I also started charging an Onboarding Fee for new clients, based on their individual needs and complexities.?
• I?only offered Direct Debit as a payment option to new clients

Another big change I made, was I?started charging fees upfront, rather than in arrears. This was yet another mindset change for me, but, so many other providers charge for services upfront, why not Bookkeeping Services!?And..it contributed to a huge change in cash flow?for?my business...(coupled with Direct Debits, these two changes in particular transformed my cash flow!)

I also gave myself permission to acknowledge my?worth (and charge it)!

Call it imposter-syndrome, call it fear, call self-doubt, call it service-syndrome. Yep - I just came up with that last one, though I think it rings true for people with a mindset of priding themselves in supporting and serving others, as we often struggle to realise that?in order to do that, we also need to look after ourselves.

It wasn't easy, though I finally started shed those layers and become comfortable with the fact that I had something of value to?offer.?

And it snowballed. As my confidence grew, I became more comfortable identifying the clients I wanted to work with (and those I did not), I stopped recoiling at the thought of talking about my worth, or taking cover when I had to talk pricing.?

And my clients - the majority didn't bat an eyelid.?Those that did, are no longer my clients.

It was a complete change of mindset for me.?I’m not saying it was super easy…I had years and years of habits to break.?But the results were almost immediate and I was back to enjoying being in business again.?It certainly didn't hurt that the following financial year?I was rewarded with an increase in revenue?beyond my?expectations.

Later this month I am running a free webinar on pricing (reach out to me for the link if interested in attending) and for those who are already Bookwiz Academy Members, they will be receiving a 5 part series on pricing that will delve into the Why's and How's on the below and I'll provide them with some handy guides and templates to add to their toolkit.

• Why you need to ditch hourly billing, and How to do it.
• Why you need to know your Minimum Fee/Revenue per Client, and How to calculate it.
• How to determine the best Fixed Fee pricing model for your business.
• Why you should be offering Packages, and How to build and sell packages.
• How to migrate existing clients from Hourly Billing to a Fixed Fee Model or to a new Fee Structure.

If you are interested in finding out more, reach out to me and I will send you the link to the webinar (also available on my LinkedIn posts), and, I'll send you some information on Bookwiz Academy which I have created specifically to help Bookkeepers at any stage grow thriving, profitable businesses. (If you would like a 15 minute tour to check out Academy, feel free to DM me!)

Keep Thriving!

Martine