Blue Elevator Blog

It’s not so taxing to scale your business

Debra’s business had grown over the years.  Everyone and every business reaches a point of diminishing returns.  In business, increased activity can become a plateau.  This same plateau often results in an eventual decline.

The conundrum

With a burgeoning tax practice, Debra (the Founder of RD Tax Service) was maxed out.  You see, when you provide great service, it is natural for people to refer to you.  Clients would refer additional clients.  Those clients would refer additional clients.  Debra was up to her gills with clients.  And, Debra was drowning.

What to do?

Debra’s tag line is “Our Heart is Our Strength.”  And to this end, Debra’s heart was to help more customers – but there was no time left in the day.  So, what do you do if you are out of energy and can’t scale your business (e.g., can’t make any additional profit, and can’t take on any more customers)?  You have 3 choices:

1. Keep doing what you are doing.  Result: Burn out.  Decreased customer service.  And, eventual loss of clients and profits.
2. Cut back on your clients.  Result: More energy.  Decreased profits (due to fewer clients).  And, disappointed clients.
3. Or, take on more clients.  What ???

Several Choices – but only 1 option

Debra had to make a decision.  But, when your tag line is “Our Heart is Our Strength,” Debra knew she only had one option.

She couldn’t keep doing what she was doing.  She was wise enough to recognize that this would eventually let all of her clients down.

She couldn’t cut back on clients: this would be disappointing to some of her existing clients.

Debra’s only option was to continue to take clients.  But how?

The conundrum and the solution

So, here’s the fix:

• Debra had the idea to transition a certain number of her clients to another outstanding associate in her office.  No clients would be lost.
• Debra was able to free up her schedule so that she wasn’t spending evenings and weekends cranking out a continual stream of tax returns.  She was able to work out a “split” with her associate so that she was still able to have contact with transitioned clients while continuing to participate in the profits.
• Note: This did not result in a loss of profits – as Debra had more “time margin” in her life so she could take on more clients.
• But, we did not completely fill up her schedule.  We would be intentional about leaving some time and mental space so Debra could also work “on” her business – not just working “in” her business.  Not to mention, still working in some personal margin for her philanthropic activities and family.
• Next, we began streamlining and standardizing.  In reviewing her billing register, we noted that different clients were paying different fees for similar work.  We created a menu-driven pricing mechanism which standardized her pricing.
• This standardized, menu-driven pricing would serve to preserve customer goodwill.  Certain customers may have been paying dissimilar rates for comparable work.  Standardized pricing would prevent discrepancies when friends and family (who refer friends and family) inevitably compared fees.
• Additionally, eliminating this pricing inconsistency resulted in a huge increase in her billings and profits.  Note: No additional work here.  We just eliminated the pricing inconsistency and boosted profits.
• In addition, a local market survey revealed that Debra’s rates were a bit low.  Due to the high-quality of her work and perception in the marketplace, we were also able to simultaneously raise her fees.  This resulted in a further dramatic increase in revenue.  So, an across the board rate increase resulted in even more additional profits.

Recognizing that increasing everyone’s fees to “market” could result in the loss of clients, we established a pricing algorithm.  New clients would be brought in on the new pricing structure.  Existing clients would be “grandfathered” into the new fee structure.  That is, phased into the new fee structure over a predetermined period of time.

How’s that for starters?

What’s next?

Additionally, to help with the seasonality of her tax business (e.g., January through April), Debra made the decision to expand her bookkeeping services.

Bookkeeping revenue is year-round.  This would add a lot to the bottom line and serve to eliminate the feast or famine seasonality of the business.

• Plus, having clients that have their books maintained throughout the year helps clients stay organized so Debra avoids getting the proverbial shoe box full of receipts at tax time.  This saves time and money for both Debra and her clients.
• Plus, by having monthly bookkeeping, Debra and her clients have the information they need to do year-end tax planning.  Debra and her bookkeeping clients know exactly where they are.  This enables Debra to provide additional tax-saving tips to save her clients’ hard-earned money.
• Not to mention, as tax customers need bookkeeping, bookkeeping clients need tax returns.  So, each side of the business would feed the other.  True synergistic growth.

And, today, Debra and Blue Elevator™ continue to enjoy a great working relationship.  Since we are always headed to the next level, and every level has a plateau, Blue Elevator™ and its member clients are always working on that proverbial next level.  It’s called continuous improvement.

Advisory – not an expense – but an investment

Given the above, it is clear that Debra invested her hard earned dollars in business advisory.  But more importantly, she invested herself in the process.  If we told you that her returns way exceeded her fees, that isn’t even the complete picture.

Thank God for it all!  And God willing, those returns continue.  And, in part, because Debra continues to engage in the hard work of working on her business.  Thank God – and kudos to Debra.

Have your cake and eat it, too

At Blue Elevator™, we believe you can have your cake and eat it, too.  More freedom.  More clients.  More profits.

But most importantly,  there are thousands of more people out there that are looking for great businesses.  And, great businesses are backed by great business owners.

And that’s where we come in.  At Blue Elevator™, we help great business owners scale their businesses – so they can simply help more people.  Everything else is just gravy.

Thank you, Debra!

Blue Elevator™ is thankful to have an ongoing relationship with this keystone client.  Debra continues to service more and more clients.  As she guards her office time, she is still a hard-working CEO.  It’s just that now, she is working as smart as she is working hard.  She is investing in her business so that she can continue to serve more and more clients.

With the resolve “Our Heart is Our Strength,”  Debra is preparing to offer her heart (and great bookkeeping and great tax services) to the next generation of individuals and business owners.

Well done, Debra!  Keep up the great work!

What about you?

We’d love to come alongside and help you, too!  At Blue Elevator™, we help our clients scale their businesses.  After all, it’s in our tagline: “business to the next level™.”

We encourage you to also read this article – The 3 Reasons for Engaging Blue Elevator.

If you have even the slightest interest, Contact us today!