Welcome to the Escaping the Accountants Trap podcast. It's a podcast to help accountants, CPAs and bookkeepers escape what we call the accountants trap. It's where you're stuck working with low value and high demanding clients. But at the same time, you can't raise your fees because you have a ton of competition. Well, how do you escape the trap? One way is the topic of today's episode, and that's by increasing your value to your clients.

All so you can raise your income without working more. To help me with the discussion, I've invited Geraldine Carter, a consultant who works with CPAs to create the accounting firm and life they've always wanted. Geraldine. Welcome to the show. Hi, Adam. Thanks for having me. Yeah, I'm really excited about talking with you today because this is something that's near and dear to a lot of accountants.

Not just CPAs, but bookkeepers and really just anybody that has a financial, financially, a company that does transactional or compliance work. And I'm really excited to get to dig into your story. One thing that I noticed on your website that I wanted to start off the bat asking you about is this and that when you ran your company, you were so desperate to work with an accountant who could help you, but they were so busy, you know, overwhelmed with delivering reports and returns, compliance, transactional stuff.

They were so busy to to do it, doing all that, they couldn't help you. So tell me about that. Sure. So the long story short is that I co-founded a company with a friend in 2008, when it was still kind of baby internet days and QuickBooks, QuickBooks online wasn't too much of a thing yet. And because of my engineering background, I fell into what you would call sort of loosely, the CFO role managing the money.

There was we grew over five years to have $1 million in revenue. I was about 35, one of those sort of accidental entrepreneurs, the kind that your listeners know a lot about. They accidentally land in business and know nothing and have to figure it all out themselves. And but I was, you know, fine managing the money. I wasn't scared of it.

And I certainly wasn't scared of the technical aspects of of the, the money and the spreadsheets and the forecasting and that kind of thing. But what I couldn't get from my accountant was, was the forecasting piece of how much money is going to be coming in. If this much money comes in, how many people can we hire, or how much money do we need to come in in order to be able to hire these people?

Because we need to fill these roles in order to put our events on and what is tax going to cost us? Social security, FICA, all the rest. It was super bewildering, all this fake make up or whatever. And it was 6.2 and 4.2 and I mean, it was it was very difficult to understand and not just the tax part, but the financial modeling and the forecasting and her advice was just use the QuickBooks budgeting tool.

And that thing at the time, at least it was junk. And it slowed down the growth of our business because I spent so much time on my own trying to figure out what I needed to know, whereas had she had the bandwidth and had she charged me appropriately, she would have maybe in my, in my estimation, been able to shortcut the learning that I needed so that I could waste less time inside my own spreadsheets at two in the morning.

So that's what I find. I think a lot of accountants are still in the place of pricing too low and having to work too hard for the money, and they're leaving their clients without the guidance that they need. And you said at the top there they worry about raising fees because of competition, which we can get into. But I would argue that the more you raise your fees, the less competition you have.

No, I agree with you. I love that. You know what's ironic about what you just said in your experience is that she, your accountant could have made more from you. If you would have, she would have provided what you really wanted and that I mean and there's a lot of there's something that I think a lot of accountants can't really wrap their minds around is that that business owners know they need compliance work, they need the transaction or even the taxes down.

Any of the books done that has to be accurate. That's needed, but that's not necessarily what they want from their clients. So talk talk to me a little bit about what you found that business owners really want from their accountant. Yeah. So there are a couple things in play here. So just to spread it out there is the business owner starting out underneath 100 K who really like they're starting fresh at the learning line.

And there's a lot to know when it comes to money cash tax in their business. Yeah. So those are the those are the needy clients legitimately. And it is difficult as an accountant I think, to build your business on those people because their learning curve at the outset is so steep. And they need a lot from the accountant.

So, I account when working with my clients, we try and minimize. We have those people because we can turn them. If they're good quality, high potential, we can turn them into much better, less needy clients as they grow. But building a practice on those people is cumbersome work wise. So where we want to go is the business owners who have already sort of past their survival stage and, passed the sort of weed out phase, if you will.

And now they're they've proven that they can make it. Their business model works. They have what it takes to be a business owner. And now, yes, they need the compliance stuff, but what they want is guidance. What they want is expertise. What they want is somebody to help them talk through their money, their situation, with an eye toward looking ahead three months, six months down the line to, anticipate what's coming.

And none of us have a crystal ball. And that's not the expectation, but we're looking to at least have a sense of what are the likely scenarios that are going to play out so that we can get ahead of any problems before they become real fires. And that's those are the kinds of things that clients value. So that's where we help the CPA reposition in their own mind what the client is looking for, rather than simply the selling of accounting services.

Yeah, I completely agree with you. Two questions from that. The first is I, by the way, businesses under 100,000. I completely agree with you. They they need exactly what you said, especially sales. They just need to generate more sales. They need to get to a point where, they need advisory help. The second thing is, why do you think my second question is, why do you think accountants are not providing what you just talked about, why they're not strategic, focused or forward looking or helping their clients understand the forecast?

So a couple of things. One of them is the accounting space comes from a history of hourly billing and the belief in the space is that money comes from work done over time for clients, but money comes from value. And because they have, for so long historically billed by the hour for work performed for the client, they send the PDF invoice, they get money.

It looks that way. The illusion is strong, I get it. And because that's been the going model, that way of thinking has permeated the accounting space and the individual businesses, the accounting practices. And they and you see things crop up, like hourly billing rewards in efficiency. Right. You make more if you just go back to dial up, you make more.

If you go back to Ticonderoga pencils with erasers and you're adding machine, right, you get to build more when you do it. The slow way. So there are all these inefficiencies that have kind of been dragged along, that are baked into accounting practices, that have kept the accountant working, working, working. Because that's just how it's been done, right?

They've just perpetuated inefficiencies. They've come along, they haven't scrubbed those out. Another one is the internet and zip codes. And it used to be that before the internet, which we have to remember was like only 20 years ago, and it was very difficult even to do business online. I started when we co-founded our business. It was 2008, and we were all remote in different locations and we made it work.

But there is not the, the tools that are available now are worlds apart. And that was only 15 years ago. So if you remember how quickly things have changed, but historically, accountants have been required basically to work inside their zip code and because of the lack of internet. And so that also that way of thinking has still kind of stayed glued to the accountant, whereas now they're able to get up and out of their zip code, given technology and given the tools, but the mentality is still lagging and it's still thinking about how do I serve up accounting to people near me?

So you've got hourly, you've got geography, and you've got general ism, which we can touch on if we want. Yeah. No, absolutely. What what do you mean by that? Journalism and not being inside a niche. So I think there are more people now who are more willing to and open to the idea of going inside a niche, but because of hourly billing and zip code, most accountants have been have done accounting for anybody who needs accounting.

But the value proposition is really in the expertise and the guidance and the ability to talk with your clients about their businesses, help them understand where their business might be headed, what their cash flow needs are going to be, and even deeper than that, as you get into fractional CFO and fractional controller kind of work, right? You can get into operational KPIs and and cost management and all.

Like you can go way deeper down that rabbit hole for your clients. But when you're a generalist, you end up in the trap that you set at the outset, which is a ton of competition because you're competing with all the other generalist accountants. Yeah, and that is a race to the bottom in terms of price. And your buyer can't tell the difference.

How are they going to know a good accountant from a bad accountant? They can't tell the difference. You're commodity right? You're a commodity. And they need a way to decide. So they decide on price and likability. Yeah, that's that's not great. That's not great business positioning. So we so when accountants can dig inside and niche and or specialize, if the word niche is charged for you or focus whatever word you like, get specific about who you work with.

Then you work with clients who look like each other. They are in similar revenue bands so that you can systematize. You have a chart of accounts that applies for like you have one chart of accounts that is customized for farmers, or one chart of accounts that is customized for coaches and consultants. You have one chart of accounts because you have one kind of person and and on and on.

Right. You can. I just did an interview with a client of mine who's niched into female solo lawyers, and she keeps talking about how that niche has facilitated, enabled her to reap the rewards of systematization in her business because she doesn't have to run all over the place, creating custom work for a manufacturer, an e-commerce retail shop, and so on.

So there are countless benefits to getting more specific on who your ideal buyer is that make your business more simple and enable you to provide more value more rapidly. So is the ideas that you're able to provide. You're able to demonstrate that you can provide value because you are speaking to one particular audience. So so in order to to separate yourself from all the other accounts, and I agree with you, most people don't know what the difference between a good or bad accountant is.

The one way to to demonstrate value is by saying that I. I help people just like you. Is that the idea? Yeah, it's that and more so you demonstrate the value by having the expertise and the deepening inside the niche facilitates the expertise. Because you get inside the niche and you understand, you deepen your understanding of what these people specifically need.

So let me give you the example of a client I work with who niched into 10,000 acre farmers because it's very simple. Listeners understand. Yeah. And it's not, backyard farmers or gardeners, and it's not people with cows because then you're a rancher and it's not avocado in poor countries because that's a different business model. It is row crop farmers, corn, soy, wheat and rice 10,000 acres.

So she understands exactly. She understands what they're planting. When they're planting it. She has her finger on the pulse of the price in the commodities market. She knows when they're out in the fields, she knows when they're harvesting, and she knows what they're thinking about at those times of year so that she can plan ahead so that when that farmer comes into her office, she's two months ahead of them.

She's already thought through what they're going to be thinking about in that meeting in October. And she has the numbers ready that they need so that when they have the meeting, the farmer walks out with increased clarity. He has his answers rather than the opposite, which is the farmer comes in in October, asks a bunch of questions, and the accountants like, well, great questions.

Let me do a bunch of research and digging and I'll get back to you with them in a month. And a month goes by. And now it's too late. The topic has passed, and the farmers just kind of figured it out on his own. Yeah. So when we when you get inside a niche, you understand just how much more value you can create.

And that level of guidance and expertise is unparalleled and it's unavailable anywhere else in the market. She's the only she's the go to person and the one and only, and she sets the prices for her service. So that's I mean, that's just one example of how it can work for people who go down inside their niche. What if somebody is listening or watching right now and they they don't really have a particular niche.

They're not an expert in 10,000 acres. Yeah, you know, crops. But they they have a they have a they know a lot. They know a little about a lot of things. They worked with multiple different clients in different industries. Should they niche or can they have multiple niches or what do you suggest. Yeah. So I don't have a shit about anything.

Right. You do what you want. It's your business. The advantages of Niching is are like I just mentioned, countless and deep. But at some point you need to sacrifice variety for deep expertise. And the deep expertise will always command a price premium over breadth of skill. So what do you do if you're not an expert in air quotes and how do you get.

I think your question is how do I get started? Niching if I, you know, have a smattering of clients. So yeah, so places to start. Obvious places are in a vertical an industry. Right. So you can go if you want to start high level you can do are you professional services. If so is it white collar. Is it blue collar.

Is it fur collar. And if it's white collar then is it lawyers architects? Is it engineers? Is it coders and software developers? If it's blue collar is it trades construction? Is it plumbers? Is it Hvac? If you want to go. So we could go. You can go down down, down. And or if you want to go by topic by horizontal is it real estate investors is it stock option planning.

Is it high net worth individuals. And I can talk about the advantages and disadvantages of both because they exist. The thing to do is to take the next step. So figure out what level you're at right? If you're already at I know I want to do service based professionals, then great. Do you want to do blue collar or white collar?

There's value to be created in both locations. There's no right or wrong. I was listening to a podcast, the Accounting Today podcast and they were talking about the analyzes analyzing niches and the best opportunities. And you can go by the numbers and where you think the biggest financial opportunity is. But for small accounting firms and for people who enjoy their work and want to make a meaningful difference in the lives of their clients, there are opportunities everywhere.

And the opportunity for you is for your listeners is the one where I help my clients go? Is the clients that you're going to enjoy working with, doing work that you enjoy, and that you're good at where there's a business opportunity and find the overlap in the Venn diagram. There's no in air quotes, right? Niche. Yeah. Because that thought will keep you paralyzed and stuck.

The ave you what you want is a viable niche and almost every niche at the moment is ripe for the picking because so few accountants have niched. So pick one that you're going to enjoy and then figure out how to where the value is and figure out how to make it work. And they will all work as long as you just get inside.

But staying paralyzed and stuck is what won't work. We have a very interesting essentially, by trying to appeal to everybody, you're essentially you're appealing to nobody is the idea. And so once you pick the you pick a niche and you you zero in on that. That in and of itself is what you're saying will increase the value of your value because you are the one, you know, one of the people that can really help them.

But then how do you present yourself to that person like your your example, the 10,000 acre, farmer that the accountant meets with that person? How do they structure the engagement? So that they can raise their prices and elevate themselves beyond just saying I will do your taxes or I will do your books. Yeah. So a couple of things in here because it's not just stating that you have a niche that creates the value.

Right. We have to actually back it up with expertise and understanding that the client wants to go from their existing state to their desired future state, and their existing state is probably confused and lost about money, and their desired future state is probably understanding their money and being able to make clear and confident decisions. So the job of the accountant is to understand where their client is at the moment, their existing state and their desired future state, and figure out how they are going to move their client from the client's existing state to the client's desired future state.

That's where the value is, and it's the job of the accountant, the business owner, to do the work to figure out what that is. Yep. Which means talking to your clients, which means listening to your clients and learning to listen and tune your rabbit ears to what your clients are saying about what where they're frustrated, what they don't understand, and so on.

Rather than many accountants tune their ears to is what is my client asking me to do exactly? Yeah. So we need to tune the rabbit ears to listen for it would be amazing if God, it would be nice if. Yeah or oh man, this really I'm so frustrated when right as signs of where I want to be and where I am.

And there's a key and I'll get to your structure. How do you structure the engagement? But in the niching it enables you to find the patterns. When you find the patterns in what your clients want, that's what enables you to better systematize and make and optimize, make more efficient. And the patterns deepen the expertise. And then when you see the pattern for long enough, then you figure out, how can I package this up and separate the knowing how to do the thing, the doing from the knowing when you can package and sell the expertise in a digital format, then you don't have to work to create value.

You transfer the knowledge in a one to many, one to infinity format without doing any additional work. And so let me get to your structure, your engagement. Yeah. Question. Because this is also up to the accountant to figure out how do I need to structure the engagement in order to get my client from A to B? If my client wants to get to B, do we need to meet monthly?

Do we need to meet weekly? What do they need to learn? What do I need to teach them? What don't they understand that they need to understand so you can structure the engagement any way you like. Structure it so that it gets the client to their desired result. So I think, you know, you can there are playbooks that you can go off of as a starting point, but ultimately it's up to you to the you can also start with a blank canvas and design it the way that you know your client that works best for your client, because at the end of the day, they want the value and whatever, and they and they're essentially

telling you what the value they want is by telling you their desired state. Yeah. And that's the beauty of this. And that's how you can separate yourself from the competition and not be a commodity, because you can't really compare the value of one client to the value of another client. And, and that that just creates immense value for you.

So you can increase your income. So yeah. No. Go ahead. And I was to say, Geraldine, you know, we're almost out of time. And this is a really good discussion. But if somebody is listening and they're saying, yes, I get it, I want to find out more, where do they go? So if clients are if listeners are specifically looking for ways that they can increase their value, I have a one page PDF that they can download.

It's effortless and leverage value creation checklists so that they can get all the prompts for ways that they can increase value in their businesses without working harder. And they can pick that up at Geraldine carter.com/value. Okay. They can also listen to my podcast business strategy for CPAs. And they can find me on LinkedIn at the same name. Oh love it okay.

So we'll put those three things in the show notes Geraldine carter.com/value. And your podcast and your website. Geraldine, thank you so much for being here today. Thanks, Adam. It's been great to be with you and to everyone listening or watching. Thank you so much for spending the last few minutes with Geraldine and myself. As we discussed how to escape the accountant's trap.

Bye for now.