Why are you not as profitable as you want to be?

Jul 12, 2022 | Pricing, Sole practitioners, Strategy

Not all of my clients want to discuss profitability issues with me. So I don’t always know how profitable they are. If it doesn’t come up during our conversations then I assume they are happy enough with their current level of profitability. Or perhaps they are embarrassed because they are less profitable than they would like to be. Sometimes it’s a topic that emerges as an issue to discuss, explore and resolve down the line.

When we do discuss profitability and it is less than ideal I find this is invariably due to a combination of two or more of the following factors:

  • Wrong clients – Too many legacy clients with simple needs and low fees
  • Wrong fees – The accountant has been resisting discussing fee increases and also still quotes low to get the work
  • Not planning properly – This leads to extra work, late nights and overtime rates
  • Not working the right plan – Taking whatever work comes along even though it’s not as profitable as the work they want to be doing
  • Escalating overhead costs – Taking on more and more software subscriptions and failing to cancel the ones not being used
  • Inefficient staff – Failing to monitor and motivate staff to be more efficient (and to report extra work that could be billed)
  • Unclear expectations – Allowing clients to take the accountant for a ride or to misbehave generally
  • Unrealistic expectations – Hoping that clients will ask when they need advice
  • Not working hard enough – too relaxed and laid back for too much of the time
  • Not working smart enough – failing to plan out the work, to talk with clients and to attract the right prospects
  • Wrong service offerings – wishing they could attract better quality work without promoting their expertise adequately
  • Doing too much themselves – limiting the time available to spend on advisory and higher value work as they are bogged down in dealing with all aspects of each client’s affairs.

Discuss this post?

Please get in touch if you would like to discuss anything in this blog post. I’m always happy to do that without any charge or obligation. Book a good time here now

Like this post?

You can get links to each of my new blog posts and further practical business development related tips in my weekly emails. Join the thousands who get this free of charge by signing up here

Want one-off or regular support?

Please check out the mentoring page of my website and then arrange a call

Recent

Related Articles