From Nearly Closing Their Doors to a 25% Profit Increase in 6 Weeks
What do you do when your back is against the wall with your business? That could be the best time to take a huge chance. It paid off for our guest this week, Teresa Slack. Teresa is the CEO of Financly Bookkeeping Solutions, a Canadian bookkeeping firm with a specialty in eCommerce bookkeeping.
Unusually, they don’t do taxes for their clients. They used to, but then dropped that side of the business and zeroed in on the niche they really loved. That focus, plus some other details we discussed during the interview, got the company out of the hole they were in three years ago and into profitability.
- The Inflection Point
- The Four Big Changes They Made
- Ranking Clients
- Dropping Taxes
- Teresa’s company
- Previous interview with Mark Wickersham
- Value Pricing Academy
- Pure Bookkeeping
- Previous interview with Jackie Meyer
The Four Things That Saved the Company
The company began six years ago with Teresa and her sister, Connie. Teresa has a sales and marketing background and skyrocketed the company to the point where they had to hire people to keep up with the load. However, the people they hired were not up to the task.
Additionally, the company had trouble understanding their value. They were earning enough to keep the lights on and the employees paid, but they had nothing left over for themselves. So they went to the first QuickBooks Thrive conference in Toronto where they met Mark Wickersham and learned about value pricing.
However, what they ended up doing was fixed pricing by mistake and that led to an immediate problem. With slow hourly workers and fixed client pricing, the business became unsustainable. They knew that Mark was onto something special, but they couldn’t make it work.
Eventually, their backs were against the wall and they had to decide whether to fold the company or fix the problems. They ended up solving this with four actions:
- They fired the three hires that weren’t meeting expectations.
- They hired Mark Wickersham and joined his Value Pricing Academy.
- They started using the Pure Bookkeeping System.
- They started using Jetpack Workflow to manage their clients, projects, and tasks.
Teresa learned that understanding your value takes time, and ideally a coach can look past your blind spots to tell you what may be right in front of you. When people get stuck in the weeds with their business, they may not be able to step back and see all that they’ve accomplished.
Reminder about value pricing: you have to know what your client truly values and appreciates before you can price that service or that service bundle. Once they went through the process, they could triple their prices. But how do you get clients to accept such an enormous increase in price?
After building their packages and learning how to communicate the value of them, the next thing they did was rank their clients on a set of metrics they wanted in their ideal client. The lowest two grades received a “Take It or Leave It” option. To make it worth the company’s time, they had to pay more for the hassle.
They analyzed the upper two ranks using Cloud Pricing 2.0, a software suite developed by Mark that calculates the value of different accounting service bundles. They looked over everything they were doing for their good clients and came up with a plan.
Next, Teresa pulled clients into review meetings where they could discuss the value of Teresa’s services and to receive feedback on what happened during the year. Then they told them about the price increase. By the time they went through their client base after deciding to jump feet-first into value pricing, they increased their revenue by 25% in just six weeks!
This may seem like an impossible ask, but Teresa and her sister had no choice. Their backs were against the wall. It was either ask for more money or close the company down. Would you rather take the chance than go back to unemployment?
Along the way of looking at the services they wanted to offer, they realized that preparing taxes for their clients was not their niche. When they discovered the challenge and promise of eCommerce bookkeeping, they fell in love with it. With their guidance, they could really make a business flourish.
But taxes are the bread and butter of the accounting world. It was scary to consider dropping them completely. However, there were only a few accountants who specialized in their niche, while there were plenty of tax professionals out there. With the reduced competition in their niche, they had the opportunity to chart their own path and grab a new share of the market. But a change is risky and can make a firm owner feel nervous, so it took them two years to finally make the decision.
This was the first year they skipped out on tax season, which was strange in itself, but combined with COVID and the boom in eCommerce, they’ve been doing very well. Furthermore, they have a piece of their business that focuses on helping other accountants with their eCommerce clients through consulting. The company recognized that they could more than make up their tax income through this service that gave them the confidence to cut out the tax piece.
It’s not so much that taxes are something you should drop as you grow, but that you should focus on the pieces of accounting that bring you joy, are what your clients need, and bring you the money you want. Another one of our guests, Jackie Meyer, did the opposite of Teresa and cut her bookkeeping services to focus on taxes. The result was the same: she focused more on what she wanted to do and what her clients needed, and her business grew as a result.
Bringing People Back
Once all of these pieces were in place, the company was able to hire more people again. However, they decided to really buckle down on their hiring processes and only look for experienced people that fit with the company. Their mantra is “Hire slow; fire fast.”
They use a multi-level hiring process before they make a decision on a candidate:
- Initial interview
- Zoom interview
- Several rounds of testing their knowledge and skills
Through this careful planning, they now have a solid team of 12 people helping at the company, all using a Workflow Software to stay on the same page and follow the unique processes at Teresa’s company.
We want to thank Teresa Slack for appearing on our podcast. Take a listen to the full interview above and check out some of the resources she mentioned. They may be just the thing you need to grow your firm to the next level!