Today’s post is about how to recession-proof your CPA firm. As you may have seen in the news, it’s all about recession, recession, recession!
Firstly, I want to make it clear that I am not into fear-mongering. Despite the fact that I warn accounting firms about the dangers that are coming, I am not a fear monger. Second, just because everyone else is screaming and running to the hills, does not mean we should follow suit. However, we must still be smart about it.
If we think a storm is coming, we want to make sure we can weather it. A recession is inevitable because interest rates are moving up and inflation is going up. However, we don’t know how dramatic it will be so let’s not be afraid.
Positioning Your Accounting Practice
Once we have leveled the playing field, we can move into some tactical and strategic discussions about what you can do to recession-proof your accounting practice. This is directly related to the basic model that you have in your firm. It’s all about the positioning that you’re taking with your clients.
Positioning is your number one safety net for recession-proofing your accounting firm. If you’re only churning out tax returns and clients aren’t coming in to see you then you’re not giving them any other advice. The problem is that you’re not positioning yourself as their number one trusted advisor, someone they desperately need and wish to assist them in building the life they want for themselves.
Clients will jump at a lower-cost accounting firm if one comes along! I’ve seen it repeatedly over the years. Because of outsourcing, AI (Artificial Intelligence), inflation, and the recession, tax-only practices are being crushed.
Be Your Clients Trusted Advisor
In my own practice, during a downturn, my clients came to me more — they saw me as their number one trusted advisor and wanted me to be part of their world. The reason they were willing to pay me for my services was that my services were valuable and provided a return on investment. In their eyes, I wasn’t a cost, but rather a value.
The conversations we always had were, “Okay, if we’re planning to invest in this, are we going to get the right return?” If clients know you’re their trusted advisor, then you’re able to provide them with incredible value they can use to build their dream life. Rather than just filing a tax return.
Due to my previous experience, I know this so well. I thought the person who filed the most tax returns would win. I would compare myself with other accounting firms on how many tax returns they filed.
Shift Your Model
I used to play that game, especially during tax season. When clients came in the door, I ran and hid in my office. Time was money, so I didn’t want to talk to them. I thought I didn’t want to waste my precious time talking to them because I had a lot of tax returns to get out the door. That’s when I realized I wanted a deeper relationship with fewer clients who paid me a higher price point. That’s when my model shifted, and I got back my freedom, my money, my clients, and my time.
How do you recession-proof your practice if the recession hits? From being a tax return mill to becoming a trusted advisor for your clients, you switch your business model. This is what the Accountant Success Formula is all about. In my program, I show you exactly how to change your business model.
I’m Erik Solbakken, reminding you that when you take back control of your business model, you can take back control of your life. Stay tuned for more success tips.