How this Firm Owner Reached $500K in 48 Months
Today on Growing Your Firm, we talked with Louie Vazquez of Vazquez & Family, Inc. The firm has managed to grow from zero to $48,000 a month in just four years without taking on any debt. How was Louie able to do it? That’s what we’ll be asking him in this week’s podcast. There are some great sales strategies in this one, so be sure to take a listen!
- About Louie’s firm
- How he structures his team
- Why sales were his focus, and three tactics he uses for lead generation
- Why targeting only people who can pay you matters
- A way to let down leads how can’t pay your rates while still nurturing them
- And much more
- The firm’s website: https://www.facebook.com/vazquezandfamilyinc/
- The firm’s Yelp page: https://www.yelp.com/biz/vazquez-and-family-inc-los-alamitos
- The firm’s Instagram page: https://www.instagram.com/vbandfinc/?hl=en
Aggressively Growing A Firm To Half A Million In Four Years
Louie started his own firm three years ago after working for CPA firms for four years prior. He felt like he had enough experience under his belt and capital in his pocket to start off on his own. The business has grown handsomely, from $ 92,000 the first year to averaging $48,000 a month this year. His target is to hit at least $500,000 this year. How was he able to grow so aggressively?
First, to help him handle his growth, he brought on a senior partner and hired four employees and two freelancers.
Here’s how Louie has divided up the responsibilities at his firm:
Senior partner: Prep review, accounting review
Operations manager: Bookkeeping, tax return prep, administration, onboarding
Administrative assistant: Onboarding
Two accountants, plus two freelancers to help them if it gets busy
He hired the admin and the operations manager first, which is unusual for a firm of his size. Most firms we’ve interviewed don’t hire an operations manager until they get beyond 10 employees. Why did he hire one so early? Louie was doing it all on his own and was doing so much work that his accounts receivable and invoicing started to slip. It became worth it to hire someone for a few thousand a month to keep on top of all that.
Louie says that most entrepreneurs wouldn’t hire at this point. They would see the extra work and plow through it to save money on hiring. But this was something directly related to cashflow. If he could get someone to stay on top of this task, the business would have more money, which could be reinvested into the business. It would also free him up to focus on more revenue-generating activities.
There is a point when you run a business that you start to value your time. You really start to see where time is money. If you’re spending more time on things that don’t generate revenue, that’s a problem. It’s at that point when it’s time to stop thinking about what to do next and start thinking about who can do it for you.
Sales Is The Key
At first glance, if you saw these kinds of growth numbers, you might think that Louie was taking on a lot of debt buying up other firms to gain their clients. But he’s not. His growth has all been through sales. What was his approach?
His first piece of advice for a new firm is to hit $100,000 a year. Once you hit that point, then it is time to think about bringing in staff and delegating responsibilities so you can transition from being an accountant to being a salesperson. Ultimately, as a business owner, that’s what you really are. You’re trying to sell your services.
So you have to start thinking about what you can sell and who you can sell it to. You have to think about how you can network to get in front of more potential clients. Here are three of his tactics to do this.
First, he goes to real estate offices at least once a week to do seminars on how corporations work and the tax advantages they can gain from switching to things like using an S-corporation. Through these seminars, his firm gets a lot of referrals from property investors who want tax advice. The ROI on this approach is really good. For about 10 hours a month, Louie can get clients that have a much higher lifetime value than what he would have earned at his hourly rate.
Second, he uses Yelp reviews. Yelp reviews provide social proof. They show to others that you’re doing good work. People trust the platform. Granted, you have to watch for bad reviews and respond to them but if you have a well-organized team and good workflows then bad reviews should be few and far between.
Third, and most unusually, he uses Instagram! He uses it as an ongoing newsletter for clients and leads by sharing tips on accounting, taxes, finances, business, and so forth through small videos. So far he has about 175 videos about a minute long that he rotates through to keep the content treadmill going.
He recommends that all firms should start sharing advice through Instagram, using Yelp to provide a base of social proof, and then get out into the community and show your value to your target niche by revealing how you can help them improve their tax or financial situation.
Asking Bold Questions
One thing that a lot of firms struggle with is bringing on clients that don’t have a lot of money but are eager for your business. Your urge to help them can make you cut your prices down so you can retain that client. Avoid this!
One of the jobs that Louie’s administrative assistant does when screening clients is to ask them how much they are grossing. If they are making too little, their focus should be on increasing revenue, not asking how to save the money they have.
In order to find out where you want that cutoff to be, you have to know how to value your services. Louie breaks down his services into small parts and attaches a fee to them. For instance, bookkeeping services is one and preparing a financial report is another. Once the potential client has shown that they do have enough money to hire you, then you can use your sales skills to show them how you can make them more money by hiring you.
What does he do with the low-grossing leads? The admin sends an email with the contact information to his partner, who then gives the lead a little bit of advice on how to grow their revenue along with a note saying to contact them again when they hit a certain revenue number. If they do need the help of someone ASAP, he’ll refer them to other firms who take on those kinds of clients. By doing it this way, it doesn’t shut the door in the face of the lead and still lets them down gently. It’s a great way to nurture leads.
If they do have enough revenue, one of the senior partners contacts the lead and explores possible services. A common one for Louie is to help businesses convert into S-corporations. After that, they upsell into tax planning, then bookkeeping and so forth.
For more details on how Louie interviews a new client or how he uses Jetpack Workflow as part of his services, check out the full podcast.