This week, we’re going to discuss fees.
In my past direct consulting work with tax and accounting firms, and still today when I present the occasional fee model webinar, one common them always emerges: Small tax firms don’t price their services correctly.
Frequent comments that I receive:
1). “I keep my fees low in order to attract more volume.”
2). “It’s just me here — I can’t charge the same rates as larger firms.”
3). “I live in a rural area; I can’t get away with charging big city fees.”
4). “I’m a woman, so clients expect my fees to be lower than what a man would charge.”
5). “I’m just an EA. There’s no way clients will pay me the same rates they would pay a CPA or attorney.”
Every single one of them.
Absolutely, matter of factly, with zero caveats… Wrong.
I don’t care about your geography, population density, gender, race, license type, or any other factor. Equal pay for equal work.
Whoa, whoa, wait a second… Is a man co-opting the rallying cry of an entire pay equality movement for his own commercial purposes???
Yes, yes he is. Gleefully, and without remorse. It’s a wonderful and accurate phrase.
Seriously, the vast majority of tax professionals that are solo practitioners or own small firms don’t charge enough. This has never made sense to me. If you’re doing the exact same work, delivering the exact same work product, creating the exact same outcomes for a client, why should you charge less than, say, an IPA 300 firm? Seriously, why? If you have a really good, honest explanation, reply to this email, because I’d love to hear it.
In fact, I go so far as to say that for many services, you should actually charge more than a giant firm. Why? Because you are able to deliver much better client service. Client don’t get bogged down in the bureaucracy of a giant firm when they work with you. You have flexibility and can provide the kind of direct attention that bigger firms just can’t deliver. In some types of engagements, that reduction in client frustration is worth them paying a premium for.
I could rant on and on about this, but doing so wouldn’t answer the question that you really want answered: What should my fees be, then?
To answer that question in great detail, I’d like to bring in my … Continue reading