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Increasing Profits By Decreasing Clients

Written by: Peter Rowe

Article Overview: How do you set your company up as the only choice for your clients, and increase your profits at the same time?

Increasing Profits By Decreasing Clients

This month I sat down with Steven, an accountant at the top of his game, to discuss how we will now dovetail our services with a selection of his best business clients to increase their profits, while his accounting team solves the tax side of the equation and his financial planners grow those new profits into worthwhile long-term investments. It's what we do.

In the course of our discussions Steve was reminded of a key business lesson: He told me how, when he first bought into his practice, he resolved to be the best resource his business clients could possibly ask for, and designed a service offering second to none that included:

• Up-front pricing so that clients would know their costs in advance.
• Fixed fee service contracts against which clients paid monthly, with an annual adjustment in June to square the books.
• Quarterly (in some cases monthly) performance reviews with each Client, including benchmarking against their industry.
• Consultation on every financial matter from tax and investment to business, succession and exit strategies.

Not surprisingly, many of the original practice clients left in the first year with others being invited to do so until Steve was left with just 250 high-quality clients (less than 33% of the original client base) on whom he was now focusing his considerable business acumen.

In the three years since kicking off, those Clients have thrived under Steve's regime and most have grown substantially in both size and sophistication. The end result for Steve's own business has been no less spectacular with more than 200% increase in revenue, an even more spectacular increase in profits - and a steady stream of new ("perfect") clients drawn to his reputation.

The Lesson?

If you were to write an outline of your "perfect Client" what would it contain, what do they want, and how much profit do they generate?

If you were to then analyse your Client base, how many of them presently fit the outline? (My guess would be "20%").

How much of your profits do those clients generate for you? (At a stab: "80%"?)

What would your business be like if you worked to convert everyone into a "perfect Client"? (Don't worry, the ones you can't convert will leave!)

How much more could you accomplish with a business that focussed on perfect Clients? (I suspect your workload and stress levels would drop by about - 80%!)

What can you do with this perspective?

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Article Tags: business, clients, perfect client, profits



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