Maximize Your Firm’s Profits by Transforming Into a Profit Advisor
This episode of Growing Your Firm features Femke Hogema. Femke is a phenomenal trainer, author, and speaker who leads the charge of the Profit First community in the Netherlands. Inspired by the innovator of Profit First, Mike Michalowicz, Femke took Profit First to the next level, giving workshops in the Netherlands. As her business grew, she shifted to help accountants, encouraging them to teach budding entrepreneurs.
Femke grew her business internationally, starting 70 Profit First communities in The Netherlands and Belgium. She has further expanded her audience with the publication of her internationally translated book, The Profit Advisor. To put this in perspective, less than 1% of books published receive such attention to be internationally translated.
- What is Profit Advising?
- Guiding Clients Through The Challenges of COVID-19
- Making the Transition
- Building Connections Through Entrepreneurship
- Email: firstname.lastname@example.org
- Web (English)
- The Profit Advisor
- Profitable Plans: A 7-step Plan To Company Financial Success (Dutch Edition)
- Growing Your Revenue by Expanding Your Services/
- How to Streamline Your Business to Run Without You
- How to Profit First
What is Profit Advising?
Clients worry about their cash position and whether to be optimistic or pessimistic about their business. Inevitably, the clients miss out on serious growth opportunities. Typically, an accountant presents information to clients, hoping that they would earnestly consider the information they provide and change their business operations. However, the information being sent to the client most likely isn’t being viewed.
Femke tells us that being a profit advisor can be a new role for any accounting firm, or it can be a priceless tool for proactively assisting business owners and entrepreneurs. Profit advisors are bookkeepers or accountants that recognize the importance of historical data and compliance work. They use the information they have to help business owners and clients identify their goals, whether it be increasing revenue and profits or going on early retirement. Profit advisors help entrepreneurs reach their goals by working proactively.
Profit advisors also help business owners and entrepreneurs find long-term money saving strategies. During the interview, Femke recalled one of her clients who she recommended to close one of their stores. Within one year of following the changes she recommended, the business saved tens of thousands of euros. Within 10 years, that amount could climb to hundreds of thousands.
Guiding Business Owners During COVID-19
Some may think profit advising puts the focus only on money. Femke recalls her mother’s initial negative disposition about money. Her opinion changed when one day she met one of Femke’s clients and told her about how she changed her family’s life for the better. More money and less resource strain mean fewer arguments and more stability at home.
In a similar vein, the challenges of COVID-19 can shake confidence in the business. Femke tells us that this is the perfect time to check-in with clients to ask how they are doing with cash flow and inventory. Use this opportunity to make the community aware of financing options and resources.
Some businesses may have to close a store or change the structure of their business because of COVID-19. Femke says that this is the time when business owners need the strength to make tough decisions and the encouragement to assume a position of leadership to transparently communicate the business’s financial standing to employees.
Once everything has settled down and regained a sense of normalcy, profit advisors can help clients prepare over the long haul, given that massive changes and shifts in society tend to happen every 8-12 years.
Making the Transition to Profit Advisor
For many accountants, repositioning as a profit advisor can be difficult. However, Femke reminds us that anything accountants do proactively is advisory.
Busy accountants find it challenging to break away from simply finding solutions for the client as an accountant. Femke gives us two hard truths that many in the accounting industry are hesitant to accept:
- The processes become refined and the value of the services become apparent only as you advise clients. While it can be a challenge to gain the skills needed to become an advisor, we’ve taken away some of the guesswork in our podcast, Growing Your Revenue by Expanding Your Services.
- The challenge of moving into an advisory role can take on many facets. It takes time to become an advisor in a firm of accountants. For accountants who want their firm to operate without them while they are deep-diving into profit advising studies, it may be a good idea to revisit our previous podcast, How to Streamline Your Business to Run Without You.
Femke also offers another tip for accountants wanting to make the pivot into advising. Several firms are still operating on the hourly billing model, but Femke urges prospective profit advisers to dedicate themselves to delivering results instead of hours. Focus on selling results.
Building Connections Through Entrepreneurship
When transitioning to the fixed-pricing model, there may be some concern with how many clients you should charge at the new price, especially when you haven’t built a track record yet. We recommend using back-to-basics entrepreneurial techniques to create value for a few clients. Profit First innovator Mike Michalowicz showed us how to dig in and push a product or service in a former interview, How to Profit First: A Mike Michalowicz Interview.
No matter how you spin it, profit advisory services are a long-term investment for potential clients. Femke recommends offering a refund in addition to the projected profit increase if advisors do not attain the results they promise.
Remember, the goal is to establish a track record, preferably with clients who all seem to have the same problem. Once you have five clients all in the same industry, then you can systemize the same processes. You’ll be able to clearly tell what value your service is. There is a bit of trial and error. There’s not just one right answer.
Femke builds upon the entrepreneurial spirit by emphasizing the need to hold the client accountable when achieving their goals. She says that when profit advising, the client should be the one reaching out. “If one of the true goals of the client is to make a bigger paycheck, then the client should say ‘tell me about it,’” said Femke. “The accountant is not pushing the information.”