Building Your Ideal Clientele Through Value-Based Pricing With Shannon Weinstein
We have a very special guest, Shannon Weinstein but we are not related. She is a CPA. She runs a 100% virtual practice serving small business owners looking to grow online. She offers monthly accounting, CFO services, and tax strategy but her unique approach has enabled her to grow the practice to a little over $200,000 in revenue in three years and quit her full-time job. She lives part-time in Connecticut, part-time in Costa Rica, and is 100% remote. She says the best thing about running her own practice is getting to choose the clients that align with her goals, so she’s showing up with as much enthusiasm as possible all the time.
Before we welcome Shannon to the show, it is probably nuts to think that most of you think that increasing your fees will lose your clients, get your client roster diminished or might lower your revenue. I know everybody thinks that the way to get more clients is to discount your fees to your current clients but it’s not true. All of the clients that I have worked with who own an accounting firm, bookkeeping firm or profit-first firm, I work with them to increase monthly revenue by as much as three times by following a much newer and far simpler method.
I’m sure discounting fees, getting as many clients as possible, sending out proposals, and thinking someone might respond to you will increase your firm revenue by working harder and taking on those clients slowly but it’s a total struggle. If you are willing to peel back the onion, look behind the curtain, and get to some of the truth about what’s not working in your firm, then I invite you to book a call over at TheAbundantCall.com with myself or my partner, Denise. We would love to explore the possibilities and what’s holding you back from doing exactly what Shannon is going to be sharing in this episode. Grab the first spot you see, and we look forward to speaking with some of you very soon. Let’s welcome Shannon to the show.
Can you share with everyone a little bit about where you are at? You have your own firm. Share a brief overview.
I have my own practice. I have been doing it for a couple of years and I built it while working full-time. I didn’t make a huge leap. I made a jump from rock to rock across the river. It was not too crazy. I have been building my practice, learning, and making tons of mistakes. It has been a blast and I love it. It’s called Fitnancial Solutions based on the fact that I also work in fitness and served fitness professionals as my first niche client. I have been in fitness for years.
What did you teach?
Every variety, flavor, and specialty of Zumba, and I did HIIT and TRX.
It’s important to understand that you have to have your fitness in your business and finances. It’s very similar to being like a pro athlete. I was at a thing and they were talking about how your protective armor or helmet is your mindset. If your mindset is not right, then you are not going to have the right helmet on. When you get punched or knocked over, how can you not have a business concussion? Having your mindset in alignment and that protective armor around your head is everything in business and the fitness side, too.
We are going to talk about how you communicate your value as the CPA to potential clients. You are a couple of years in. Clearly, you have made a lot of mistakes and we have a lot of value discussions here on the show because everyone here wants to improve profitability, increase their revenue, and not feel like a commodity and run over by a bulldozer by their clients.
Shannon has done a great job at that. There are so many angles when we talk about communicating our value so, we are going to talk about three of them in this episode. It is important to grab your notepad from your phone, or maybe the yellow or white one sitting at your desk and a pen, and take some good notes because I know Shannon’s got some great stories.
When you were starting, learning what to do and what not to do, and making all those mistakes, what do you think was the first real thing you had to change and you were like, “If I don’t make this change, I will feel like I’m undervaluing myself. I’m going to have to start justifying my fees or maybe even give out discounts,” and feeling like we have to take on every single client that we work with?
What was that for you in being able to communicate your value as a CPA? If you are not a CPA, this will also work. If you are an EA, bookkeeper, profit-first professional or maybe you have an accounting firm and you are not a CPA but if you are and you want to get that value across, what’s the first thing you had to do in your firm?
I had to learn how to say no. I had to stop saying yes to everything and start thinking strategically about, whether a client, a decision, or an opportunity started aligning with my goals for my business. It did take a while though. In my first 6 months to 1 year, I said yes to everything and that was wonderful. I had to ditch that habit after a certain period when you take the training wheels off because you now have enough opportunities where you can afford to say no but you haven’t stretched that muscle.
It’s important to learn how to exercise that new muscle sooner in your business than you think you need to. The biggest thing for me when I first started was understanding that the clients I wasn’t pursuing weren’t buying a tax return, a set of books, a QuickBooks subscription or a CFO report. What they were buying was peace of mind. That was an enlightening experience for me.
I teach a lot on this. There are people that will buy to get out of pain, get towards their goal, and have peace of mind. How did you come to that realization?
From a lot of training, coaches, people telling me this, and work on understanding and asking the client, “Why do you value our service?” it was never, “You get my return done on time.” It was, “I have peace of mind knowing that it’s handled.” I realized that’s what they were paying for because I equated it back to what if someone sold to me and said, “I can make you skinny without surgery or a diet. How much would you pay for that?”
I was like, “Here’s my bank account and credit card number.” That’s how our clients feel about the financials because they will do almost anything to not have to worry about it. It made me realize that we are not just accountants. This stuff is fun or at least we take to it easier. It’s very hard to relate to that person who truly has deep-rooted financial fear or an allergy to IRS letters.
I have that allergy. It puts me in the hospital. I need to go to the ER when I see the IRS letter in my stack of mail. My pile is getting smaller because I put everything on electronic. I don’t want any mail but still, I get mail. Those IRS letters send me right into the ER. I am highly allergic to that like I am to shellfish.
What I learned from all of that was pricing based on value, not on effort. That was my first real hard lesson. You have to price on value, not on effort and just because it takes me half an hour to do an S corp election doesn’t mean it’s any less valuable to my client who’s going to experience immense tax savings from that.
Value Based Pricing: Are you marketing and selling peace of mind? Or are you marketing and selling a tax return? Because if they think they’re buying a tax return, maybe they won’t pay any more than they think they need to.
It’s one of the most important ways to communicate your value. A lot of times, we think it’s based on the amount of time. It’s not. It’s based on all of your knowledge. If you can do it in 30 minutes, you had that idea, and they didn’t make that decision on their own before they came to you, then you made their life better because now they have an S selection and a payroll. You can do a 401(k) match.
One of the best ways to communicate your value is also by pricing on that value. They don’t need to know how long it took you. When you go into surgery and the doctor tells you it’s going to be a $20,000 surgery, they don’t say, “It took me 4, 8, or 12 hours.” If it took them an hour and they’ve got the job done, they’ve got the job done.
It’s the same thing with my skinny analogy. I don’t advocate any of this unhealthy weight loss as a fitness professional but if you could make me fit into a size whatever, I don’t care how long it takes you. It’s all about the results.
Shannon, because of the Weinstein name and you are a CPA, you are reiterating everything we talk about here but it’s great to come from your perspective. Share with me a story. Another CPA, accountant, EA, bookkeeper or profit-first professional do whatever services. They are reading and they were like, “How are you able to get past that fear of it’s not about the effort. It’s about the value? How do I communicate that? I get what you are saying but there’s no way this is going to work for me. I don’t get how you can do it and I can’t. My clients won’t pay that much. They don’t have a lot of money. I see their books. There’s no way. That’s not possible. They can’t afford it. They ask for discounts.” For those of you reading, if any of that sounds familiar, here’s the possibility. What was that turning point with that one client where you said enough is enough?
I have to acknowledge and say they are not wrong when they say that but there’s a mindset shift. My question back to that person who’s asking that question is, “Who is your ideal client? Are you marketing and selling peace of mind or a tax return?” If they think they are buying a tax return, they won’t pay any more than they think they need to if they google what 1040 costs. My clients are not googling what 1040 costs. My clients know that what they bought is the fact that they can call me, text me, and send me an IRS letter and it’s handled.
I charge based on what I think is fair to compensate me for my time, energy or whatever you want to call it, and it all works out. People tend to assume clients won’t pay me for X. Certain clients won’t but do you want them on your roster? The next level is designing your client roster the way that you want to like it’s an NBA All-Star team.
You can’t have 30 players on an NBA All-Star team. They have a limit. Each of us here reading has a limit in our firms. You can scale, grow, and hire other CPAs, EAs, and everybody else to help you in admin but at the end of the day, we all have a ceiling. How do we maximize that ceiling, where each client is like the top-paid NBA player? They are paying you so it’s a little reverse. You have twenty starters on your team. You don’t have any benchwarmers.
This goes into my second revelation building my practice, and that was that I built a multiple six-figure revenue practice.
Do you mind sharing numbers?
Yes. I will be over $200,000 in my third year and I built that with seven clients monthly.
I love real numbers. Let’s do the math. Why don’t you share with us the average annual revenue that you are getting from seven clients? I’m going to guess you take seven into $200,000, and that’s what you charge monthly.
That’s a mix of my accounting, tax, coaching, and all my services. My monthly clients are paying me an average of $20,000 to $40,000 a year each, whether that be prepaid or monthly. Each of them is a source of that revenue. Those are the numbers and that’s entirely possible because I have chosen to go deep and not wide with my clients.
I have chosen to be end-to-end support, get to know their businesses intimately, and be heavily involved as a member of their team as opposed to doing spot services here and there for multiple people. I found that this works better for me in my practice and the way I manage my energy and efforts towards my clients. I would much rather charge a premium and be able to think about each of my clients every day if I wanted to.
That is highly coveted. Believe it or not, in the industry where I serve, I serve a lot of online service-based business owners like coaches and consultants. They love the high-touch intimacy because there’s this stigma with accountants that they are all old boring guys who churn out tax returns and invite you to their office. You have no idea what they said, you leave more confused than when you walked in, and you don’t enjoy the experience.
It’s like a root canal. I said, “I’m going to change that.” I want you to be excited about your CFO meeting. I start the calls with music playing or a hype-up. We are going to talk about future planning. We are going to strategize. We go into more than the numbers. We talk about the business strategy. It lights me and the client up. Everybody wins.
It’s more fun for you as the firm owner. You are getting paid well. I know you have an experience with a client that you probably let go of or you did this pivot because the time where you make these changes is when you are sick and fed up with the way things are going. You are like, “I can no longer do this.” Can you share with everyone what that client was for you? I’m sure someone reading has that client in their roster. They need to be traded to H&R Block or somewhere else where it’s more transactional.
You said, “I’m going forward. I’m going to build this firm to $200,000 or more. I’m going to do this with under ten clients, make it happen, and do it the way I have always envisioned it even though I don’t believe it’s possible.” I’m going to guess there was a little fear and you were slightly terrified making that shift. What was that client experience that made you go, “I’m pivoting and making a difference. I’m no longer going to keep doing it that way?”
I’m an accountant, so I run numbers. I realized that I had a ceiling of, “If I work 80 hours a day, I can make this happen.” That’s not going to happen. You have to control the variables in your control. What I realized was that I was never going to build the practice I wanted to by serving small-minded clients with small rates. I knew that it was not going to be a successful strategy. You get to a point though. Don’t get me wrong. Firing my first client was terrifying.
Tell us about that. I want to hear about your first client and how terrified you were firing them because every person reading has that person that needs to go. They need to go now. They needed to go a year ago. They need to go to free up that time because if they are small-minded, they are also giving you a pretty small rate. What was that client for you? Who were they?
Value Based Pricing: There’s this stigma with accountants that they’re all old boring guys who just churn out tax returns and invite you to their office and you have no idea what they said.
I do believe there are gains in the losses, as I call it. I was going to fire this client for two reasons. One was they were underpaying for the services that I was providing because frankly, who can relate to this? I cared a little bit more than they did about the business. I cared more about getting the stuff done and the day-to-day. I was putting forth all this effort and I felt like I wasn’t getting the energy back or the pay for it, honestly, because I was over-serving. What I realized was that I needed to let them go. I took a step back and realized that this was going to be difficult for me. This was very challenging for me as a people-pleaser that I decided to get some advice.
I asked other people, “The last time you fired a client, how did it go? What lessons did you learn? What could I do? How can I elegantly fire a client that leaves you amicable and respectful, and it goes well?” This is the advice I’ve got and this is what I did. I went back to telling the client, “I’m not adding value for you. I’m sorry. The way that I’m doing this now, I’m not adding enough value for you to warrant what you are paying me because if this is what you are looking for, you can get that elsewhere.” I took it back to my core values, and their core values and goals and said, “I’m not going to be able to help you meet your goals if I’m charging you this much. For me to drive results, I have to elevate the service and the fee.” I would tell a client that.
Another way I have done it too is, later on, I transitioned to being so comfortable with a price increase that I would notify clients 60 days in advance and say, “Effective on 12/31, my price is going up to this.” It’s essentially in a very professional way saying, “Take it or leave it,” because I was so confident that I was delivering those services that they would not let me go. I’m proud to say that I have never been let go of by a client but I have let several clients go.
That’s how it comes back down to communicating your value as the CPA or the EA that you are. Whatever your specialty is, insert that. I am all about letting people go themselves by increasing your fees but also giving them a reason where you are like, “We are moving in this direction. I can no longer serve you at this rate and I’m not adding value to you.” That’s being very authentic. You could add value but they are not paying you enough to put more effort and energy into it.
It goes back to something you said earlier that you care more about the business than they care. If at any time you feel that way with a client, then you are 100% being underpaid because the higher the amount that a client pays you, the more they value and respect your time. The cheaper you and the tax return are, you are now just another thing or commodity. It’s a transactional relationship. There’s no skin in the game. There’s no meat on the bones. That’s your skinny program in the business. We don’t get what we want at that rate. It doesn’t work, so it’s a choice.
If you want to learn how to communicate your value and figure that out, you first have to say, “What am I willing to not tolerate anymore?” When we were emailing and chatting, it was like setting those boundaries. For you, what are some of the boundaries that you have set that you were able to grow in three years to a little over $200,000 with seven clients?
I know someone reading is going, “How did you possibly do that and still pay your bills and staff without a scarcity brain?” It’s where you are like, “I’ve got to get all the clients.” You did that in your first year but clearly, you made a shift fairly quickly because you figured out that you have a ceiling and that you run numbers. Every single person here has a ceiling. You wanted to work with non-small-minded or small-rate clients anymore. That’s probably how you started. You were like, “That’s not going to work because I ran the numbers. I’m an accountant and I understand numbers.” What were some of those boundaries that you put into play?
One of the first boundaries I remember putting into play was not allowing people to book a consult with me out the gate. I’m qualifying the folks that get to take my time during the week that are elevated and qualified leads. The other part that’s a little bit more literal here is how I did it financially. I built this while I was still working a corporate job. I happened to work at a company where I wasn’t working in accounting. I would work there during the day, and whenever I had the chance at night or mornings, I would be committed and hustling. I was building this practice.
The beautiful thing is I had the choice of cherry-picking or handpicking my clients that I wanted to work with because I preserved my time. I said, “If I have this much time during the week to dedicate to serving these clients to the best of my ability in X number of hours, I want the best of the best that align with me.” I had that job to sit on and other sources of income.
I was lucky in that sense. I look at it as that was the biggest blessing for my business because it allowed me to have those boundaries and choose my clients, not out of scarcity and desperation, and saying because I need the money. I could choose who I wanted to work with because I wanted to and that set the tone for my business to grow. It was finding the right clients without feeling rushed. That was huge for me.
Kudos to you that you had the cushion to do that. A lot of people here might be in a job and you are like, “I want to go do what Shannon is doing,” and do it on your own. Each and every one of you has the ability to do that. I always talk about how every person reading this is a genius. You have the smarts that people like me will never understand. I’ve got a C in Accounting. I have a degree in Finance but the accounting stuff never made sense to me, and I want peace of mind.
If you get good at giving confidence to people like me that you will ease my mind, so I don’t have an allergy to my IRS letters that show up in the mail, you can get paid well. It’s having that belief. If you have the business acumen that you want to start and get going, and a job that can help you pay for funding your startup at the same time in getting your firm off the ground, then you can jump ship. When did you jump ship? Did you do it cold turkey one day?
Yes. It was a transition and jumping ship is a very difficult decision to make. I’m like, “When is that going to happen?” It was in 2021. This is fairly new in terms of a full-time gig for me but the beauty of it is that you can plant the seed and water it while you are working. It doesn’t have to be rapid growth. Don’t be fooled by these Instagram businesses that are growing so rapidly. You grow at your own pace, where you are comfortable and you will be able to do it 100%.
It’s not that if you didn’t build a million-dollar practice in your first year that you are some type of failure. It’s all about patience, growth, finding the right clients to work with you, managing your time and energy, and making sure that you are creating the right containers for the right type of work that you are doing. I could preach that all day long. That was the other way that I was able to grow so quickly. It was aligning my time that I spent X time on client calls and X time on creative work. I knew when I was showing up at my best and I leveraged that.
Thank you so much for being here with us and sharing your story and journey. Congrats on jumping ship in 2021. To grow a firm on the side part-time to $200,000 with seven clients is impressive. Keep up the great work. I can’t wait to hear what you create in the next 12 to 18 months. Is there anything else that you would love to leave the audience with or something we didn’t talk about that you are like, “I have to say this,” that would benefit them in understanding to communicate their value as the CPA, EA or whoever they are, who’s reading?
Don’t be afraid to ask your clients or potential clients what they value in you and what language they are using to describe what you do because we are so out of touch as accountants with what people think we do or what our brand is as accountants. You inherently have a brand with that word accountant. You’ve got to find out what that means to people so that you can either bust the myths associated with it actively or understand that and play to it to help educate people on what you do and why you are different. It’s huge.
Thank you again for being here with us on the show. It was an honor to have you.
Thank you so much.
What an amazing episode with Shannon Weinstein. I’m so impressed with everything she has created, and congrats on leaving your corporate job. I’m sure that feels freeing like you are flying through space light as a feather. For those of you that feel like you have shackles on your ankles stuck at your desk job or corporate job and you are sick of working for somebody else, then you can start your own firm on the side and quit with confidence one day soon.
What I want to make sure we hone in on as we wrap up is designing your client roster. You want an all-star team. We don’t need benchwarmers on our team and those dead weights that don’t get us to a championship all-star game. What can you do to design your client roster the exact way you want, where you can generate $20,000 to $40,000 a year, either having them prepay you or charge monthly per client?
It is entirely possible because you are all geniuses. You are smart and intelligent. You have gone through a lot of schooling. You have a lot of experience. How can you choose to go deep and not wide like Shannon did and be heavily involved in the client experience? What actions do you need to take to either trade your players to someone else like H&R Block or one of them and upgrade so you have all-stars on your team? We all have a ceiling and a capacity but we get to choose who gets on our team.
I was talking about our protective armor. If we are thinking about the NFL or one of the teams, where they have to wear a helmet, think about that in our mindset and that we need to have strong protective armor to design our client all-stars for us to have peace of mind in our firm. You sell peace of mind to your clients but everyone here wants to unplug, go on a vacation, and not have to deal with the mental chaos that goes on. Have some more excitement for your work and eliminate the burnout that you feel every single tax season or around October 15th or September. Any of those feelings can dissipate.
It’s important to remember that there is a far simpler way to do that. You don’t have to discount your fees, get as many clients as possible, and send out another proposal again. If you are interested in learning how to do that, pulling back the curtains, and getting to some of the truth, so you can have an enormous weight lifted off your shoulders, remember to head on over to TheAbundantCall.com to book a chat with me or my partner, Denise.
We would love to explore the possibilities of working together if we think you are a good fit and we can help you. At least, you are going to have the most valuable hour in your firm that you have ever had working on your business instead of in your business. We look forward to speaking to some of you soon. If not, I will see you all in the next episode. Have a beautiful day.
About Shannon Weinstein
Shannon is a CPA running a 100% virtual practice serving small business owners looking to grow online. She offers monthly accounting, CFO services and tax strategy. Her unique approach has enabled her to grow her practice to multiple six figures in revenue in under two years and spend tax season working in Costa Rica. Shannon says the best thing about running her own practice is getting to choose clients that align with her goals so she is showing up with as much enthusiasm as possible.