How to Implement Value Pricing

Rob Nixon

CEO & Founder, PANALITIX

www.panalitix.com – www.robnixon.com

[email protected]

http://www.panalitix.com/

http://www.robnixon.com/

mailto:[email protected]

We have worked exclusively for the Accounting profession for over 20 years

We have offices in Australia, Philippines, the UK & USA

We have served over 160,000 Accountants in over 30 countries

We currently have over 2,500 users (Accountants) in 9 countries

We are currently connecting to 86,000 SMBs through Accountants.

@therobnixon | www.panalitix.com| #firmofnow

WE EXIST TO HELPAccountants navigate disruption and

become the disrupter

Accountants run a great Accounting

business

Accountants grow their firms

Accountants deliver business advisory

services to their clients

Accountants transform businesses.


TODAY

How to Implement Value

Pricing

AVERAGE OF 800 FIRMS COACHED

Averages – of the full financial year prior to

implementation

Starting average

End of year 1

Year 1 increase

End of year 2

Year 2 % increase on year

1

Year 2 increase on the starting

numbers

Revenue

Profit – before partner salaries

$947,418

$304,915

$1,556,258

$587,290

64% $1,936,512 24% 104%

93% $801,620 36% 163%


#firmofnow

FREE tickets

(YES in chat)

PROFIT

CAPACITY

GROWTH


POLLING QUESTION

What is most important to you in 2017?

1.Profit improvement

2.Creating capacity

3.Growing clients & revenue.


THE OLD BUSINESS MODEL

Productive time (%)

People Power

Average charge rate

Write downsX =- Revenue

Labor costs

gross profit

overheads

Profit

=

=

X-


WHO WAS THE

CULPRIT?

@therobnixon | #firmofnow | www.panalitix.com

Reginald Heber Smith

1889 - 1966

1919 – created ‘billable hour’

Why would you operate an outdated model developed by your great granddaddy?

POLLING QUESTION

What is your current profit per partner?

1.<$100K

2.$100K - $200K

3.$200K – $350K

4.$350K - $500K

5.$500K plus.


PRICE EVERY JOB UP FRONT

VALUE PRICING ON

SPECIAL PROJECTS

CLIENT COMMS

PROGRAM

WORKFLOW EFFICIENCY

MODEL

ALL CLIENTS ON CLOUD

ACCOUNTING

MARKETING THAT WORKS

SALES SKILLS

BUSINESS ADVISORY SERVICES

THE 8 NON-

NEGOTIABLES

PROFIT

CAPACITY

GROWTH


PROFIT PER CLIENT MODEL

28 hours to complete

$4,900 priced in advance

$3,900 new

projects

$8,800total client

fee

$175average

hourly rate


8 hours to complete


$4,900 priced in arrears

$245 average

hourly rate

$487average

hourly rate

$316average

hourly rate

1

2

3

4

TOTAL NEW PROFIT FROM THIS CLIENT =

$3,900


Aaron Blauwww.blauco.com

Tempe, Arizona

In the trenches


http://www.blauco.com/

PROFIT PROGRESSION

PROFIT

YOUR VALUE BELIEF & YOUR VALUE CONTRIBUTION

Price arrears + AHR aware + charge rate increase1

Price arrears + AHR targets + some new services2

Some price up front + some write ups3

100% price up front + efficiency + charge rates still4

Value Pricing + $1 per hour + time budget

5

No time sheets6


AN

NU

AL

AC

CO

UN

TIN

G

SE

RV

ICE

Basic Intermediate AdvancedCloud accounting software Cloud accounting software Cloud accounting software

Lodgment of TAX Lodgment of tax Lodgment of tax

Lodgment of annual return Lodgment of annual return Lodgment of annual return

Year end review meeting Year end review meeting Year end review meeting

Unlimited phone and email support Unlimited phone and email support Unlimited phone and email support

Regular tax updates Regular tax updates Regular tax updates

Interim financial statements Interim financial statements

Year end tax planning Year end tax planning

Annual cashflow forecast

Monthly cashflow report

$250 per month $500 per month $750 per month


Mark Saidwww.mksgroup.com.au

Melbourne, VIC

In the trenches


http://www.mksgroup.com.au/

David Cowlingwww.robertsandcowling.com.au

Brisbane, QLD

In the trenches


http://www.mksgroup.com.au/

Value Belief

Value Perception

Value Contribution

TO VALUE PRICE


“Our charge rates are in line with

others”

“I’m too busy, I’ll just charge by

the hour”

“It’ll probably take X hours so we’ll charge Y”

“I can get it done really fast”

“There’s too much time on the clock –

we better write some off”

“I’m afraid of what the client

will think”

“What if they say no to me”

“My clients will never pay that

much”

LIM

ITIN

G P

RIC

ING

BE

LIE

FS


ALL CLIENTS

BUYING EVERY

SERVICE THEY NEED

THAT HELPS THEM

ACHIEVE THEIR

GOALS!

GROWTH

PROFIT

CASHFLOW

ASSET PROTECTION

TAX MINIMIZATION

FINANCIAL RETIREMENT

SUCCESSION

ESTATE PLANNING /

LEGACY

DELIVER THE

AWESOME 8

CLIENTS


FOLLOW THE DIGIT FLOW

Accounting Software

Bookkeeping

Compliance

Business Advisory

Wealth Development

Estate Planning

YOU


Key Area Now

Partners

Accountants

Administration & Marketing

Client numbers - groups

Average project value

Number of projects per year per client

Average fee per client group per year (projects x fee / project)

Revenue

Salaries – excluding partners

Office overheads

Total costs

Profit before partner salary

Productivity / Utilization – Partners

Productivity / Utilization – Accountants

Average Hourly Rate (AHR) - client hours

Average Hourly Rate (AHR) - all team all hours worked

1

4

3

200

$2,200

4

$1,760,000

$450,000 (74% GP)

$310,000

$760,000

$1,000,000 (57%)

30% - 506 hours

75% - 1265 hours

$316

$130

$1M

PR

OFI

T PE

R

PAR

TNER

$8,800

POLLING QUESTION

How much profit do you want to make?

1.<$150K

2.$150K - $300K

3.$300K – $600K

4.$600K - $1M

5.$1M plus.


POLLING QUESTION

How are your enthusiasm levels so far on this webinar?

1.Not enthusiastic at all

2.Moderately enthusiastic

3.Pumped and ready.


PROFIT

CAPACITY

GROWTH


PROFIT

CAPACITY

GROWTH

WIP and Receivables

Write offs / ons

Client service

Upfront Pricing process

People development

Productivity

Policies / processes

Workflow managementEfficiency model

People mix / location.Administration team

Firm cloud

Team Performance

Average Hourly Rate

Niche markets

Best buyer strategy

Client selection

Business Advisory Services.

Value Pricing

Brand development

Lead generation program

Sales process

Retention system


No. projects / client / year

Services mix

Communication program.

Web dominance

Sales skills

Client cloud

FIRM DEVELOPMENT PROCESS

POLLING QUESTION

What will be the difference when you implement these strategies?

1.Better lifestyle

2.Personal / family happiness

3.Happier clients

4.Change my life

5.All of the above.


#firmofnow

>1,500 @ FIRM OF NOW

Within 12 months attendees believe they can increase…

LOW AVERAGE HIGH

Profit $ by in next 12 months …

Profit % by in next 12 months …

Capacity % by in next 12 months …

Revenue $ by in next 12 months …

Revenue % by in next 12 months …

400%

$15,000 $1,500,000$202,500

10% 75%

5% 100%31%

$10,000 $1,500,000$317,421

5% 356%52%


PROFIT

CAPACITY

GROWTH

WIP and Receivables

Write offs / ons

Client service

Upfront Pricing process

People development

Productivity

Policies / processes

Workflow managementEfficiency model

People mix / location.Administration team

Firm cloud

Team Performance

Average Hourly Rate

Niche markets

Best buyer strategy

Client selection

Business Advisory Services.

Value Pricing

Brand development

Lead generation program

Sales process

Retention system


No. projects / client / year

Services mix

Communication program.

Web dominance

Sales skills

Client cloud

FIRM DEVELOPMENT PROCESS

YOUR JOURNEY TO

BETTER NUMBERS,

MORE TIME &

DELIGHTED CLIENTS


IMPLEMENTING PRE / DURING TAX SEASON

Implementation Manager

to guide you

18 Step Workflow process

for efficiency

Pricing Power / Value Pricingfor margins

KICKSTART business planning

Finding opportunities

during Tax Season

TRUST / ELEVATEleads for after tax

season


2 x FREE tickets

valued @ $594(Next 2 HOURS ONLY

5PM EDT)

POLLING QUESTION

How many people would you like to attend Firm of NOW?

1.0

2.2

3.2 – 5

4.5 – 10

5.10+


2 x FREE tickets

valued @ $594(Next 2 HOURS ONLY

5PM EDT)

Next 2 hours only - By 5pm EDT - TODAY2 hour Early bird special 2 free tickets - save $594

Discount code – 2IN2

www.firmofnow.com

http://www.firmofnow.com/

How to Implement Value Pricing

Business

Transcript of How to Implement Value Pricing