Incite-FUL Profit Podcast | Incite Tax

Tips to Grow Your Small Business

• John Briggs • Season 7 • Episode 18

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Following these three steps will set your small business on a path to growth and success. Have questions? Leave them in the comments below.

And remember...the #IRSSUCKS

John Briggs | Tax Genius
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Ninety percent of the economy is small business. So ultimately, the future of our economy is in your hands. That’s why I want you to be successful. Whatever your desires—whether you want to manage lots of people or have a lifestyle-type business—the mistakes I’m going to share with you should help you out.

Let’s go over some of the marketing mistakes and the solutions we came up with. These marketing changes helped one of our accountants grow their book of business by $224,000 in just 12 months.

I joined BNI (Business Networking International) and some other networking groups. I was spending like 20 hours a week just shaking hands, talking to other business owners, and hoping they’d refer people to me. It was super inefficient. I’m not saying networking groups don’t have value, but the ones I joined were either free or very low cost. And guess what? They mostly connected me with other business owners who also liked low-cost and free services.

Other than that, I didn’t really do much else. I did end up meeting some business owners, and for anyone interested, I offered to do a free seminar—like a lunch and learn or a dinner session. If they were willing to gather people, I was willing to talk about taxes. And I’m talking basic stuff.

Lunch and learns and small events can be really good for bringing in leads. It’s something you should consider. One of the most efficient ways to find groups to speak to is by emailing your current client list. Let them know you’re looking for a few opportunities to teach a group of people.

That experience shaped my philosophy of "serve first and teach first," which became my entire marketing philosophy. I really hate the hard sell—no one likes that.

Another important thing in marketing is building digital real estate around topics people want to learn about. There are ways to figure this out—Google has tons of keyword search tools. You can see what phrases people are typing in frequently. Then, you create content that answers those questions directly or even uses the exact phrases people are searching.

When you do that, you start showing up in Google searches. Building this kind of digital real estate allows a prospect to start building trust with you. When people find your content valuable, they’ll keep coming back for more.

How do you do this? Consistent blog posts, videos, guest articles, reports—anything that educates. But the secret is consistency. You can’t write a blog post and then wait four months before the next one. Or launch a site with five posts and then go silent. That doesn’t work.

If you’re serious about growing your business, you’re probably looking at spending 5 to 10 hours a week on this.

And here’s one last thing about marketing: marketing and sales is like dating. Don’t try to get lucky before you even go on the first date.

We get a prospect’s name and immediately try to sell them our highest-ticket item. Instead, we need to build a relationship. Just like dating, the goal is to get the prospect to take the next most logical step. They give you their name—great. Are they willing to open up about what’s troubling them with accounting or taxes? Get them talking. Once they’re talking, are they open to recommendations? Ideas? That’s how you move them along the path.

The next thing I want to talk about is mistakes I made with process flow. In the beginning, I was super inefficient at bringing in new clients. I mentioned I was spending 20 hours a week networking to land just a few gigs. That meant I was also scattered trying to do actual client work and keep track of everything.

Then I got really good at bringing in leads—so good, in fact, that I had too many clients. Yes, that’s a real problem. Now I’m not just struggling with managing tax return projects, but also with onboarding new clients, which is a whole project in itself.

Does the client understand how our services work? Do they know what they’re paying for? Without a clear system, everything becomes inefficient.

That’s why I recommend using a software solution to manage your workflow. There are lots of options out there, and no, I’m not being sponsored. But whatever you choose, just get something that works.

Do we still make mistakes? Of course. Do clients leave because of those mistakes? Yes. The average retention rate in accounting firms is 78 to 85%. Our firm is at 95%, and our project flow is a big reason for that.

True growth happens more from retention than from constantly chasing new clients. Retention increases when your systems wow the client. What I just described makes clients feel involved in the process. Rarely do we get asked, “Where’s my tax return?” or “What’s the status?”

The next part is about managing cash flow.

In my first year on my own, I did what I call being “astitute.” When someone asked what I charged, I’d say, “What do you want to pay?” Basically, I accepted whatever someone was willing to give me.

That is not a sustainable pricing strategy. It doesn’t give you flexibility, work-life balance, or the confidence to grow. Plus, clients who are only looking for the lowest price usually refer other people who also want the lowest price.

But what you do is so much more valuable than just being a commodity. I get that there are a lot of options out there, but you’re a real person. You add value that software never could. Don’t sell yourself short.

At a Big Four firm, I learned the dangers of the billable hour. I was promoted based on how many billable hours I had, but I had no control over workflow. Very few people in that model do. And the inefficiencies? They’re passed on to the client.

So, a client might end up paying more just because the staff accountant working on their project had nothing else to do and took their time. Clients hate this model. They feel nickel-and-dimed. It doesn’t feel like you care about them.

We believe you should charge based on the value you create.

We have enough clients and enough leads that we don’t have to work with people who are just shopping for the cheapest price.

Another cash flow issue I had: when I was doing $200,000 in revenue, I had almost $100,000 in accounts receivable. That means I gave myself a third full-time job—chasing down payments.

Now, our process includes collecting payment info in the engagement letter. Clients authorize us to charge them once they sign the 8879 to file the return. That change made our A/R way smaller and way less of a problem.

The last thing I’ll say about managing cash flow: Profit First.

It’s based on Parkinson’s Law. That law says demand expands to match supply. So, if you’ve got one big bank account, guess what happens? Expenses will expand to match what’s in there. That’s human nature—we’re not going to change that.

Instead, put boundaries around it.

Read the Profit First book—it changed my life. At a minimum, I suggest setting up a few different bank accounts. One for income taxes. Another to set aside money for your own pay—your “owner’s pay.”

That way, as revenue increases, so does your take-home pay. You don’t fall into the trap of growing revenue but not growing what you actually bring home.

I hope you learned something from this. What I shared has drastically changed the trajectory of my firm, starting from when I was solo.

I hope you take action. I know it will serve you. I know you’re going to benefit from it.

Thank you for being here, and I look forward to hearing from you in the future.