The Ambitious Bookkeeper Podcast

233 ⎸ No More Arbitrary Price Increases [vlog]

• Serena Shoup, CPA • Episode 233

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This one is a little different. One day in February I decided to vlog my day.. a sort of behind the scenes of my day. I wasn’t sure what I was going to use this footage for. And then… I was inspired a couple weeks ago (by the time this comes out) to write another BTS Newsletter. The two are **completely unrelated in topics—** combining the voice over of my Newsletter (unfiltered thoughts combined with a little education + provoking thoughts) with my random vlogging day.

I hope you enjoy… make sure you watch it on YouTube for the full effect.

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Subscribe to the Newsletter. I don’t sell in them. They are my own personal thoughts and musings as I build & grow my businesses. There will be typos. Half the time, I write them from my phone. Right when inspiration hits.

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Today I'm doing something a little bit different. If you've been in my world for a while and you're a, an accountant or a bookkeeper, I actually write a behind the scenes newsletter every so often when I'm inspired. It's not written by ai. I don't even ideate with ai. Um, in fact, I don't use it for a lot of content creation because I feel. Well, That's a video for another day. what I'm getting at is I've written a newsletter, uh, for my accounting and bookkeeping community, and in case there are any of you out there who don't read the newsletter, I figured I would kind of just like. I tell you about it here, and, uh, as you are watching a day of behind the scenes, they are no way related. Um, what I'm doing on this behind the scenes vlog is not in any relation to what I wrote about in the newsletter. In fact, the newsletter is called Volume seven. No More arbitrary Price increases. It's about nine 15 and I have, it's Thursday, so I have my team calls, um, at 10 where we meet weekly as a team and go over all the firm operations, client status, things that we need to talk about. Um, and so I'm just getting my. Third cup of coffee and I'm gonna go over to where I work, which is just a few steps away and kind of boot up and get ready for our team meeting. You know what advice? I am pretty much beyond sick of hearing. Is, raise your prices, charge your worth. And I got to thinking about this because in the online course space, there's this idea that you should increase the price of your programs almost every time you launch. And I disagree, and I haven't raised the price of my programs in probably two years. During the height of inflation, I opted to keep my prices the same. Reduce payment plan fees and even in some instances, reduce the price of some programs, and I even reduce the price of some of our bookkeeping services. some might argue that discontinuing the use of a discount is effectively a price increase. I think it depends on the way those discounts are used. If you always show things on a discount as a pricing psychology tactic, then yeah, if it's a true limited time discount and otherwise the product or services being sold and people are buying at full price outside of a certain window, then it's simply charging regular price. But I digress. This team meeting was a pretty quick one. Normally they go about an hour, but we are at the end of a month rolling into a new month end. So we don't have very much lingering about clients, uh, that we needed to talk about, and everyone was pretty much on. Track with everything that they should be doing. So it made my job a little easier today, so I have some extra time before my next call, which is going to be a live q and a for my bookkeeping community. I do them every month on the final Thursday where I just go live on YouTube and on Zoom. For the community and people can ask questions about building a bookkeeping business. So I'm gonna do a few things in between meetings and maybe if I have time I'll go for a walk. but right after my life q and a, I actually have a dentist appointment, so I have to scramble across town for that. I just ended our live q and a and I am now unplugging hack can put my backpack in case I decided to go work at a coffee shop or something after I run to my dentist appointment. Um, the joys of overbooking yourself and I have to remember to bring my camera with me so that I can continue. On this, um, documenting of my day. Before I dive a little deeper into each of these, I want to address that Charge Your Worth piece first, as I'm writing this or reading it, we're on the final day of my Bookkeeping Biz workshops that I host for bookkeepers and accountants wanting to start their own virtual. Practice. Every time I host these, we get lots of new bookkeepers into our world. Some are experienced corporate accountants with CPA licenses and some are truly brand new to accounting and bookkeeping, and then there's everything in between. What they all have in common is lack of confidence in their skills. Whether that is real or perceived, that is why they join the workshops. You know what side you sit on if you have any amount of self-awareness. And I refuse to sit here and perpetuate the idea that anyone can become a bookkeeper and begin getting clients right away. All right. I made it to my dentist appointment. I was 10 minutes late and since I'm such an easy patient, they accepted me in, I'm still trying to solve the mystery of where my car keys are in this car somewhere. I was able to start the car and hopefully I can start it again. I should be able to if I started it the first time, but I am really confused about where the heck my keys are, unless they're just like. Somewhere in my backpack. oh, they might be in my sweater. They're probably in this sweater. Well, okay. Mystery solved. I found my car keys. So I did bring my computer. I also brought my sketchbook. I should have brought my water colors'cause it's such a beautiful day. I kind of wanna go sit by the lake or something and paint. It's like 70 degrees in the middle of February. The end of February. And um, I know I have work that I could do, but I have honestly been cranking so hard lately that I kind of just want a little bit of a break. And tomorrow I'm gonna be working, even though it's Friday and I normally don't work. I've decided to do something new in my, um, community. I'm a part of a few different net networking. Groups. and I decided to do open office hours where I post up at a coffee shop for an afternoon and I just have invited people from the group to come on by to cowork or to get questions answered about their bookkeeping. And so I'm really excited about that. Um, we'll see how it goes or if anyone shows up. If not, I get time at a coffee shop to work and that's all good. but it's so nice how I feel like I would be wasting the beautiful sunshine if I didn't go do something outside. So I'm gonna figure that out. I truly believe that if you do not understand the foundations of accounting, whether you have a degree or not, that's not the point of this. you have no business taking on clients by yourself unless you commit to hiring someone to look over your work or you work for someone else to gain the skills with oversight. If you know accounting, you know that the foundations of accounting serve as a double check for your work. Everything must balance. Well, I decided to. Grab what I had in my car. I have a sketchbook. I have my backpack and some water. An advantage to find a pencil in the car. All I had in my backpack were pens and I'm gonna go to one of my favorite spots to just think and be inspired and see what happens. I'm gonna take a little detour though, because as I was walking out here, I noticed somebody created a little shelter out of trees and it looks really cool. How fun is that? It's like a giant fork. It's so big I can stand in it. This is so much fun. If you don't know how to check your work, go and find the education to get to that point. Please focus on learning the skills before you split your focus on also learning how to build a business. That goes for any industry. If you're listening and you're not in accounting. Go focus on building the skills before you start splitting your focus and also trying to learn how to build a business. It's just so much at once and you will crash and burn. Okay, now with that soapbox out of the way, if you're still here, let's chat about raising prices and when it actually makes sense and isn't just an arbitrary price increase because you've been in business a while and you need to raise your prices, number one. You may have underpriced from the beginning and we all start somewhere and usually that is a very low price point. We don't know yet how long things will take, how complex they'll be, what level of effort we will need to communicate with clients, overhead costs, and not to mention that confidence piece. So we typically underprice thinking it's competitive, but we need to go through this phase in order to prove to ourselves. I can do this, I'm good at this, and I'm finding ways to be more efficient. This is true whether you charge hourly or flat monthly. We all screw this up at the beginning. There's not really any way around it, unfortunately. And as a little sidebar, if you didn't screw up here in the beginning, good for you. You were probably somewhat overly confident or a really good sales person, or probably you've done this before, but you're the exception my friend. You're not the norm for the rest of us, this is when it's okay to increase your prices with each new client. To test your selling skills, to test the market, to see what it can handle as far as pricing goes. That's basic economics. Speaking of economics, number two, you're at capacity. This is when you need clients to leave or you need to hire in order to create the capacity, and you only wanna bring on clients that are willing to pay more. You can afford to lose one client that isn't happy with the price increase in order to create capacity because the remaining clients who receive the price increase will cover the loss win-win. I just got home from the day and um, yeah, it's been a pretty busy day. I stopped at the grocery store after I, um, went to a informational night for my middle child who is going to an upper elementary school next year. Um, and now I'm gonna cook some dinner. Most of us, however, are actually terrified of this scenario, And don't truly believe it will work, but most of the time it does. You're a math person. Do a little math. Figure out how to make this work. If you spread the increase across all the clients so that you can afford to lose one or two. Run a few scenarios. Look at it objectively. That's what we try to tell our clients. Look at the numbers objectively. They'll tell you numbers don't lie. Number three, scope increases. Next we have the actual need to increase prices because there has been true change in scope. You're doing more work, things are more complicated or complex, or volume has increased. It's time to rip off that bandaid. I am currently actually in this situation where I do need to increase prices on a couple of clients because the anticipated scope is not what the reality is. I actually have to re-scope all of our clients for something we used to say was unlimited because a couple clients are really taking advantage of that, probably unknowingly and unaware of the amount of work it creates for us. And no, it's not communication, it's bank accounts, arguably. This could fall into being underpriced, but I'm gonna stick it here under calling it an increased scope instead. Because the work itself is changing from when we originally price the client. Number four, the real value increases. Lastly, this is probably the greatest of areas because who actually determines how much value is being provided? This requires very careful consideration. Case studies, prior successes, and sales skills. This really is only something that you can do for new clients coming in. It's not something that you can change on a current client unless they're asking for additional help, not included in the original scope, and then. That's just an amendment and a scope increase. This also requires testing the market to see what people are willing to pay for the value that you're providing, and it requires understanding what individual clients find valuable. For some, it's fast turnarounds of reports. For others, it's access to you. Each client has different value drivers, and it's your job to find out what those are when you're in discovery so that you can position yourself as the solution And present the value you bring. So I ask you this, if your price increase doesn't fall into the four above categories, why are you doing it?

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