By Linda A. Hunt

About two months ago on a Monday morning I received a fax from one of our clients disengaging our services. As you can imagine, this is not the type of fax that anyone wants to receive, especially on a Monday morning! The reason stated for letting us go was due to “poor economic conditions” and had “absolutely nothing to do with the services they received”.

This particular client’s business is a privately held equity fund and is heavily involved with the stock market. Even though I had knowledge that overall the market has been in a bit of a downturn, this fax surprised me for several reasons:

1)    Even with the great working relationship we have with this client, there was no discussion with us before executing his decision and my staff assigned to the account had no idea this was coming.

2)    He felt the finance function was expendable! Leading me to question – had failed in demonstrating the value we provide to our client?

Immediately upon receipt of the fax, I called my client to uncover the underlying motivation for their decision to disengage us.  I knew there were alternative ways in which we could continue to work together while they rode out this rough patch and wanted to communicate that. When I reached my client, I heard the distress in his voice. He was being pressured by the investors in the equity fund to lower costs and he felt that we were one cost that they could do without because he has a financial background. (I won’t go into what a big mistake I believe this is.) He was already under stress and now he was increasing that stress by adding the work we performed to his already over burdened work load. He had made his decision and at that time could not see any other alternative. All I could do was respect where he was in the process and check in on him periodically.

Here’s the thing I have learned over the years - people will react to situations in ways that may or may not make sense to you and there is nothing you can do about it – it is out of your control. My client’s reaction makes no sense to me and is out of my control. All I can do is talk to my client, satisfy my curiosity to determine if there is something that we could have done differently or better and know when it is time to move on from trying to “fix it.”

Experiencing any loss of revenue is not fun and while this loss has impacted my firm it has not crippled us because of measures I have taken over the years that have helped to cushion and even out the sources of our cash flow. Here are a few of the things we have done:

Ø  Diversified our client base and making sure one industry NEVER represents more than 30% of our total revenue base. While the majority of our clients are service based businesses they are NOT all in the same industry. This is very important. When I first started my business we were working with a lot of interior designers/decorators. Then the about 10 years ago the northeast, where we are located, experienced a major hiccup in the real estate and home improvement industry. My interior decorating clients were not getting business or paid and that rippled into my firm not getting paid, causing a major problem to my cash flow.

Ø  Added recession proof businesses to our client portfolio. There are businesses out there that are ALWAYS busy, like lawyers and funeral homes. After experiencing “not getting paid because my clients were not getting paid”, I started thinking about businesses that are always busy and added a few of them to our client portfolio. Think of these businesses like an insurance policy.

Ø  We limited businesses in complimentary specialties within an industry to less than 40% of our total revenue base. For example: general contractors, electricians, plumbers, interior designers, etc. At the time our interior decorating clients were not getting paid, guess what? Our general contractor clients were not getting paid. It is important to remember that a downturn in an industry such as home improvement affects a good number of complimentary specialties. Having almost you entire client portfolio in complimentary specialties within one industry can be the end of your business.

Ø  We NEVER allow one client to make up more than 25 % of our total revenue base. Having one client that constitutes more than 25% of your total revenue base is very risky and you have placed the control of your business in your client’s hands, unbeknownst to them.

By implementing these guidelines over the years, we have been able to “recession proof” our business and keep at bay any major cash flow losses from losing a client. The percentages above are the ones that work best for my firm and it took us a couple of years to incorporate all of them. If you have been in business for a while, this is not something that you can do overnight and that is okay. As long as you are aware of this and incorporate measures into your future marketing efforts to diversify your client portfolio you will be just fine.

Remember, in life there will always be situations that are completely beyond your control and that is okay. Protecting your business involves making sure that you and your business, are not reliant upon any one customer, industry or employee for that matter.

By Laurie O’Neil

With a competitive work environment and changes in the economy, how do you keep the employees you have? You spend so much time and effort on educating your employees, replacing them can be quite costly. Your management style as a business owner can have every effect on your staff. Are you a manager that supports learning, growth, inspires loyalty and creates a work environment that people love? Or are you a Micro-manager who is so hung up on every detail that you are stifling your employees’ growth and inspiring your employees to shop the want ads instead? These are important factors for employees when they accept a position with your company.

Some key factors that inspire employees to stay at a job are:

1. How Supervisors Act: Are they a micro-manager who stifles employee’s growth capabilities or do they inspire hard working loyal employees?

2. Communication: Control your tone and pitch. Body language, expressions and pace of movement can tell it all. Look out!

3. Control Level of Stress: If you are stressed you will convey this to your employees. Stress can bring out the worst in you. Find better ways to deal with it. You may not even notice that you are stressed but your employees will. Do you think they will tell you? Mine do. This was an area I needed help in. I am very crisis oriented, but my staff is not. Be open to learning lessons from your employees. If you don’t you may have mutiny.

4. Motivation: This area is key. Employees want to:

      a. Have their talents on the job be utilized

        b. Do meaningful work

        c. Be recognized for a great job done

        d. Enjoy the work environment

        e. Have good pay and benefits

        f. Agree with the values of the organization

        g. Have supportive management

This is what makes the world go round. Employees spend the majority of their lives working. Make coming to work fun!

As you grow your company, management styles will have key effects on your growth. Constant turnover can reflect badly to the clients and clients will loose their confidence in your ability to hire right people.

By Linda A. Hunt

Last night I was talking to a friend who commented that I had become quite a marketer. I really don’t think of myself as a marketing person, just someone who knows a lot about finance/accounting and a little bit about marketing. Today I thought it would be fun to share with you my history as it relates to marketing. Read on for a good laugh!

Phase I – Minimal Effort
When I first started my business, I was naïve enough to think I did not have to do any marketing or what I refer to as my minimal marketing phase. I made a few contacts, had a few clients and thought I was golden. When I found myself sitting around twiddling my thumbs, I then entered the stop/start phase.

Phase II – Start Again/Stop Again
This is when I would start marketing doing a variety of activities, get new business, stop marketing because I was busy, wait for the “busyness” to slow down and then start the cycle all over again. After I had repeated this a couple of times, I entered the “let’s run around like a chicken without a head” phase.

Phase III – Running Around Like a Chicken without a Head
In this phase, you probably met me because I attended every possible networking event that existed – no kidding! I was exhausted from all of this running around and completely discouraged because I was seeing very little return for all of my marketing efforts. Let’s not forget to mention all of the money I spent attending these events.

Phase IV – Peace and Consistency
Somehow sanity returned and I entered the peace and consistency phase! Ok, a mentor of mine sat me down and said “What are you doing? Take a look at what has worked in the past, what you like and don’t like about it and come up with a new plan.” That is exactly what I did.

When you are the owner of a small business, marketing is the lifeblood of your business. Without it, there are no clients - without clients there is no cash – without cash there is no business. Here are a few tips that helped me regain my marketing sanity, are effective and helped me to even out the flow of new business my company receives each year.

• Target Your Marketing Efforts – you cannot be everything to everyone, when you try, your marketing message is confusing and not effective. Take the time to truly define who you are targeting. The more you can niche your business the clearer your marketing message is. Don’t worry, this doesn’t mean that you won’t work with anyone outside of your niche. The clearer your marketing message, the more prospective clients are attracted to you.

• Focus on Benefits, Not Features – your prospective clients aren’t interested if your services utilize the latest technology. They want to know the benefits – what will solve their problems – this is what will make them take action. Always highlight how your services will save them time and money.

• Tell Your Prospective Clients What Action To Take and How – To you it may seem obvious, but it’s not always to a prospective client. Walk them through all of the actions they must take to accomplish what you want them to – call you and hire you for your services!

• Track and Measure Your Marketing Results – you must track and measure your marketing results so you can repeat what works and stop doing what doesn’t.

• Market Consistently – you can’t market one month, then wait three months and market again. Your marketing efforts need to be consistent over time.

• One Thing At A Time – implement one new marketing strategy at a time. Make a plan for that strategy, assign a time frame and then breathe. By focusing your efforts on just one new strategy at a time, your attention is focused and you will be able to tell sooner rather than later if this is something that is working for you.

I would love to hear from you and find out about your experience with marketing! If they are anything like mine, we’ll have a lot to talk about. Email me at info@bkpr-network.com.
 

Hi – it’s Laurie this week. I am just returning from the beach in Rhode Island. If there is anything you will learn about me is I work hard and I play hard. I love the beach and enjoy riding through the country with my Harley. In the past week I have been able to connect with a lot of you. I have enjoyed learning about your practices and finding out more about you. As always, Linda and I love hearing from you so don’t be shy, drop us a line.

In this week’s article, Linda brings up a good question: What Marketing Phase are you in? This brings back so many memories for me. I was the chicken. What are you?

Last night we held the second part of How to Price and Package Your Services. What a fabulous call. It was great speaking with so many of you with and being able to answer your questions live!

Wishing you financial serenity,

Linda & Laurie

Hi – this week it’s me Linda. I am writing to at 30,000 feet somewhere over the middle of the United States. I took a couple days to meet up with some friends, relax and have a good time! I am sorry to say that I do not have any pictures to share with you – I really have to get myself a digital camera!

Before I left for vacation, I had a conversation with one of my subcontractors who had made a request that was not only very strange, it was also in direct violation of their subcontractor agreement with my company. All I had to do was to remind them of the agreement they signed and the situation was resolved. It’s a good thing I have well written agreements with both my clients, employees and subcontractors. All of my agreements contain language that protects me and my firm.

In order to grow our firms we have to leverage ourselves, which means hiring employees and/or subcontractors. When you are ready to take this step, make sure that you are protecting the business and reputation you have already built up. In this week’s article, Laurie talks about some hard earned lessons she learned about working with employees and subcontractors.

Wishing you financial serenity,

Linda & Laurie

By Linda A Hunt

A couple of months ago, I referred a prospective client who was not right for my firm to another bookkeeper who I thought would be a better fit. I sent him an email and then I followed up with a phone call so that I could give him all of the details that I had learned in my initial conversation with the prospective client. I had not referred anyone to this bookkeeper before. I found it interesting that I was doing most of the follow-up to give him business and this of course, got me thinking – is following up a lost art?

Since I had told the prospective client that I would pass their name along, I set up a reminder in my calendar to follow up with both the prospective client and the bookkeeper in a few weeks time. When I did I ended up having a lovely conversation with the prospective client from whom I learned that they were working with my referral and very pleased with the outcome. When I called the bookkeeper, who I referred the business to – no response!

This is not the first time I experienced this and I am sure it will not be the last. Life, these days, seems to move at the speed of light and we have tons of technology to help us keep up that speed. To me, technology represents a double-edged sword. While on one side it can make our lives simpler by automating time-consuming tasks, it also keeps us running at a pace where we forget to slow down to be people and connect as people.

Following up takes discipline. Sending a handwritten note is the most powerful and least expensive way to deepen a relationship. A handwritten note denotes a relationship and leaves a lasting impact.

Over 80% of my business comes to me through referral. I have spent a great deal of time forming relationships with my colleagues and have to do very little other types of marketing. The day I receive a referral, I send out a handwritten thank you. I don’t wait until or if it turns into business. I believe that my referral rate is so high for two reasons:

1) All it takes to receive another referral is a simple acknowledgement to the source of the referral to keep them coming, and:
2) I ask them to keep referring to me.

It’s that simple. Remember to incorporate personal touches in all of your networking and you will set yourself apart from the pack and watch the referrals start to roll in. Following up is one of the easiest ways to distinguish yourself from others. Don’t under estimate the power of tangible appreciation.

In my prior life, I was a controller of a recruiting company. so I have some insight in this area. Asking the right type of questions and finding the right candidate can be challenging. Often we get our personal feelings involved in the hiring process. You like the person but the person may not necessarily have the right skill set for the job. Often we may compromise what we are searching for in a candidate in exchange for an easy fit.

Here are some things that you want to think about before you hire an employee:

1.  Put together a job posting that will capture the interest of a potential employee, flexible hours, benefits, the job requirements.

2.  When recruiting for an employee, have a job description put together. This will have a job summary, duties and responsibilities, complexity of work, experience, skills, and education. This will keep you focused on who you are looking for.

3.  When interviewing have some behavioral type of interview questions. For example: Tell me about a time when your workload was heavy. How did you complete all your work? Remaining calm under extreme pressure is a difficult skill for many people. Tell me about a situation when you were able to do this. These types of questions give you some good insight on how someone could react with your clients. Sometimes people do not know how to answer these questions.

4.  Look for someone who has consistent job experience, spent 4 or more years in one position at some point in their career.

5.  Be sure to check references!!!!

Be firm on what you are searching for in a candidate. Be clear about what you stand for and what your values are in your company. You are searching for someone who shares similar values. Finding good employees will not come easy nor should it. In my last job posting, I phone screened all the resumes and only interviewed who I thought was a perfect fit for the job. This may be time consuming but it will cost you in the long run if you do not take the time.

Copyright © 2008 Linda Hunt and Laurie O’Neil, The Bookkeeper’s Referral Network, Inc.

Hi – this week it’s me Linda.  Last week I had my first coaching call with my new coach and I am so excited to be working with her!  We have entered into a year long private one-on-one coaching program designed specifically around my needs.  She is an extremely talented business woman and I know that what I learn working with her I will be able to take my businesses to new heights and also share with all of you what I learn along the way.

It is really important that we nurture ourselves and seek out and find the resources we need that will help us achieve success – whether that be coaching, self study courses or hiring employees.   We cannot do it all by ourselves nor should we!  In this week’s article, Laurie talks about how to find good employees.

Wishing you financial serenity,

Linda & Laurie

We got so many great responses to our question “What is Your Biggest Question About Making Money as a Bookkeeper?”  Below is a breakdown of the most frequently asked questions.

• How Do I Price and Package My Services - 63%

• How to Collect a Retainer - 13%

• How to Pay Your Staff Including Benefits - 12%

• How to Increase Your Customer Base – 12%

Here’s our answer to YOUR biggest question:  How do I price and package my services?

Setting fees is probably one of the toughest areas.  Many of us struggle trying to determine whether or not it is better to charge an hourly rate or a flat fee.   We then struggle with knowing whether or not we are pricing ourselves to high or too low.  Here are our general thoughts on setting fees:

  • Fees are to be based on value, not the task.

  • Never use only time as the basis for your value.

  • Don’t stop with what the client wants.  Find out what the client needs.

  • Provide at least 3 options every time:  the choice of “yeses”

  • Ensure your client is aware of your full range of services.

  • Fees have nothing to do with supply and demand, only value.

I need to increase my customer base.  Naveen 

Hi Naveen,
Setting aside dedicated time for marketing each week is crucial for growing your customer base.  It is so easy to get wrapped up in the detail of doing the work for our clients that we sometimes forget that we are business owners to and the responsibility for growing our business rests upon our shoulders.

I would pick a day of the week that is quiet, for me it is Wednesday and spend at least a half day dedicated to marketing.  Your marketing efforts can include identifying a networking group you could join, sending out letters to colleagues letting them know about your services; sending out introductory letters to CPA firms.  The important thing is to spend time marketing.

I had one more thought, ask your current clients if they know of anyone who is need of your services – business owners always know other business owners.