Price your fees to allow for growth
One thing I've learned over the years is how to better price my fees. In the beginning, many new owners will try to buy market share with fees that have razor thin profit margins. So you have all these new customers and are as busy as all get out. The trouble is you now you need additional staff and have no excess cash to pay for them and/or more space.
I had someone ask me if I would match their previous tax preparer's rate for services. I told him no because the price quote he received from that practitioner was in the range of someone who does it for "mad money" on the side and probably out of their home. I need to cover overhead, some percentage for me and for staff. Certainly the prices I have are competitive but they are competitive for someone who is looking to remain a long term player in my industry.
What do you do once you need to raise your rates to allow for growth (larger office, additional staff, better equipment, etc..)? Those special rates you offered are now much higher than before. Will your clients accept that big jump in fees out of loyalty and years of working with you or will they look for another practitioner who offers their services for "mad money" on the side?
I am a CPA in San Antonio and I provide services to small business and individuals in San Antonio and surrounding areas.
Richard J. Garcia | 03/31/2010