Developing Your Small Business Services Niche

1. Developing Your Small Business Services Niche Presented by Tamera Loerzel and Michelle Baca July 13, 2010

2. Learning Objectives • To draw your clients closer to you and increase your value to them by building (or redefining) your small business services niche by identifying: • The five P’s of marketing your small business services • Ways to position – and differentiate - your small business services • How to effectively communicate your packaged services to your clients and in your market • Steps to take to ensure you are resourcing your small business services practice for success • We will focus on small business services within a CPA firm, and you can apply these concepts to any service area or niche within your organization

3. Poll #1 • What best describes your role in your organization? • Partner or Owner • Small Business Service Line Leader • Client Service Director or Manager • Client Service Staff • Marketing or Business Development Professional • Firm Administrator • Other

4. Current State of Small Business Services • Most CPA firms today are centered around two primary service areas - assurance and tax • Some firms have specialty niches, such as PFP or Business Valuation • Most firms have expertise in specific industries • Some firms also have “accounting” practices where they deliver financial statement preparation, bookkeeping and other services to small businesses

5. Current State of Small Business Services • Small business services (SBS) aren’t always the most favored practices – they are viewed as a “must offer” service but not strategic • They typically include some combination of: • Accounting, bookkeeping and “write-up” • Payroll • Outsource CFO services • Accounting software support and implementation services • Financial statement prep and review • Tax compliance services (in some firms)

6. A Focus on Small Business • There are 20.4 million small businesses in the country that do not have any employees (Small Business Administration) • This is a huge market of small business who need accounting support services and many CPA firms recognize that their trusted advisor status makes them the “go to” place to get this support • You can use your small business services to deepen your relationship with your clients • It will require being more proactive and less transaction focused • Doing so will elevate your services to a value-added profit center

7. A Focus on Small Business • Building – or redefining – your small business services niche will require that you: • Define the positioning, packaging and pricing for the ideal target clients of your small business services • Develop a consistent promotion plan to uncover new opportunities for your services • To “strangers” to your firm and within your existing clients

8. Positioning

9. Start With Your Strategy • To begin, develop your small business services’ mission, visionand values • A mission articulates why the service line exists and answers the question, “What difference do we make in the lives of our clients (and sometimes our employees and community)?” • A vision statement is often internal only as and identifies the “dream” for the service line including: • Revenue/clients/staff • The services offered • Where the practice will be in three to five years • The values are the core attributes or guiding principles that the partners and staff are willing to be held accountable

10. Positioning Considerations • Consider moving your positioning to more proactive, consultative services • Change your messaging from the transaction processing and “write-up” work to consultative advisory services • This includes changing what you call this service line, moving away from “write-up” or bookkeeping to small business services or client accounting services • Focus on how you can help your clients run their business better, increase their profits and save money

11. Positioning Considerations • The work and transaction processing is necessary, but not what the clients value • Clients want your advice about what they can do to improve their business processes, cash flow, and profitability

12. Include Features and Benefits • Remember the difference! • Features include the list of products and services you offer • They are the “facts” about who you are, what you do and how you work • Benefits articulate the difference –that you being will make in your clients lives and businesses • They answer the WIIFM question “What’s in it for me?” or “So what?”

13. Sample Feature/Benefit Statements • We provide customized small business services based on your current business requirements • We help you reduce the time and money required to manage your accounting function and provide proactive information to help you make timely decisions to achieve your growth goals • Our small business services team becomes your outsourced financial team • We act as an extension of your team, handle your accounting requirements and provide process improvements and best-practice suggestions to help you achieve your financial objectives

14. Understanding Promotes Credibility • Deepen your client relationships by earning and keeping your clients’ trust • To do so, learn the ins and outs of your clients’ industries and their individual businesses, too • You will build credibility and elevate your role with your client by: • Speaking your client’s language verbally and in writing, in all aspects of your relationship • Understanding your client’s key pain points and business processes • Being aware of unique regulations and timing issues they may be subject to • Offering solutions that are tailored to client’s business objectives

15. Know Your Clients • Understand your clients by understanding: • Industry trends, cycles, politics, opportunities • Read their trade journals and attend their conferences or events (it’s a great place to network, too!) • What keeps them up at night? • Do you know what their top challenges are – the economy, managing costs, employee turnover, generating additional top-line revenue, etc.? • What they’re interested in • Remember what they tell you, which will require that you have a process in place to do so

16. Product/Service Mix

17. Poll #2 • Which small business services do you currently provide your clients? (check all that apply) • Bookkeeping and accounting services on a weekly or monthly basis • Payroll processing and payroll tax filing • Monthly, quarterly or annual financial statements and balance sheets • Outsourced CFO or controller services • Fixed assets and depreciation maintenance • Tax returns and tax compliance, such as quarterly taxes • Tax planning and consulting • Cash flow analysis • Management advisory services • Strategic planning services • Software training and support services • Other

18. Adding Value • Once you’ve defined – or redefined – the services you’ll offer, define how they will be delivered • We’re not going to discuss your service methodology, per se, but rather how your services can add value to your clients, such as: • Including “free” phone calls from your clients • Meeting with them quarterly (or monthly) to review key financial information such as cash flow, AR, and expenses • Setting up processes to alert you (and them) to key performance indicators that affect their business, profits, sales, etc.

19. Adding Value • Your proactive consultative services are what your clients want – and will pay for • You will deepen your client relationships by becoming their go-to person for advice • You can also find other opportunities your firm can add value to them

20. Focus On Your Clients • Sometimes we make the mistake of thinking that it’s enough to: • Deliver what we committed, when we committed it for the budget we committed • Have our work be accurate • Be accessible (available) and responsive (returning calls and emails) • But we have to go deeper and deliver more and we have to be different • Spend a few minutes asking your clients about their issues, what keeps them up at night and their plans for the upcoming year • It will position you as someone who cares and acts as an advisor rather than just a tactical service provider • So many clients say, “I wish my CPA would reach out to me just to check in” and “I wish my CPA would think proactively and not just give me advice after-the-fact”

21. Making A Difference • To really make a difference, solve your clients’ problems, offer new ideas, show you care • Here a short list of ideas to do so: • Foresee issues that they cannot; identify them and help them plan to address them • Identify market opportunities they can capitalize on • Look beyond the face value of the things they tell you – intuit what else may be going on • Add value by introducing them to new services and ideas • Don’t be parochial and only think of your service line – what else can we do across our other services? • These can be new legislation, standards, methods, practices or technologies • They can be industry trends or practices you’ve seen other clients employ successfully • Call them “out of cycle” to check in and see how they are doing • Take them on outings or invite them to events

22. Packaging and Pricing Your Small Business Services

23. Establish Pricing Strategies • Traditionally, SBS have been sold and billed on a time and materials • The client then wants the minimum they need and expects to pay a lower hourly rate, because it’s “just bookkeeping” • It’s difficult for clients to experience – and for you to deliver – the value-add services when you use this pricing strategy

24. Establish Packaged Pricing • Consider moving toward a packaged approach for the services you provide • You can bill it monthly, quarterly or annually • Then your client can plan and budget for their accounting services • Bundle your services based on your clients’ needs, building in the advisory services we discussed • You’ll find you can charge more for a fixed fee program and be able to offer the services that make the real difference for your clients

25. Establish Packaged Pricing • Identify ways to package them together • Determine which services logically can go together • Identify what options you can provide clients so they can tailor a services package to meet their needs, for example: • Financial statement preparation only or include accounting services, too • Full-service payroll or tax reporting and filing only • Accounting services, payroll tax reporting and accounting software support • You may choose to include corporate and owner tax returns, too • Be sure to include the tax partners in your sales meetings and proposal development!

26. Pricing Your Packages • How you price your services will be dependent on several factors, including: • The client’s involvement, resources, and skill set • The frequency of the service (weekly, monthly, quarterly, annually) • The number of services your client needs • The size of your client (number of locations, entities, etc.) • Where the services will be performed (remotely or at the client’s office) • The software or technology your client is using • The amount of consultative services you include

27. Pricing Your Packages • Because of these dependencies, a services package can range from a few hundred dollars to several thousand dollars a month • Your smaller, monthly financial statement clients could be a few hundred dollars a month • Larger, outsourced CFO or controllership clients could be $5,000 a month and up

28. Pricing Your Packages • It’s imperative for you to define in your engagement letter: • The services you’re providing, together with what physical deliverables the client receives and who does any applicable tax filing • Your expectations of the work your client will be doing • Your service team who will be performing the work • You then need to be diligent – and teach your people – about change orders • If you don’t, your profitability will erode quickly

29. Place – Your Ideal Target Clients

30. Defining YourIdeal Target Clients • Once you’ve identified your positioning, product/service mix and pricing strategies, you need to define your ideal target clients • Ideal target SBS clients will be dependent on your firm’s: • Overall service mix • Industry specializations • Geographical or market opportunities • You have to pay attention to clients that cannot be served, too, due to conflicts with other services like audit

31. Defining YourIdeal Target Clients • Focusing on specific industries or market segments can allow you to: • Realize increased efficiency because you know how to set up and service clients of a similar type in a similar fashion • Increase your value to clients because of your deep understanding of their industry

32. Defining Your Ideal Target Client • Revenue or employee size are likely determinants for your ideal target client • You need to determine if you want to provide “lower-end” after-the-fact financial statement prep work for small mom and pop shops • High-growth companies or start-up companies may be good targets for transaction or whole department outsourcing • You’ll be more profitable – and more successful – focusing on those companies that are looking for an advisor versus a low-cost financial statement

33. Finding Your Ideal Target Clients • Determine where you will find and how you’ll reach your ideal target clients • Within your existing clients (unless it is conflicting) • Within your firm (tax department referrals especially) • Referral sources and other CPA firms • Trade conferences • Publications • Associations • And their constituencies or lists • Client referrals

34. Marketing Activities to Promote Your Small Business Services

35. Brand Positioning Activities • Write your SBS “story” and elevator pitch • Develop a section of your firm’s Web site that is dedicated to your niche • This helps increase the credibility of your offering • Create a high-quality printable PDF that tells your niche “story” • Allow your clients to speak for you by including client testimonials and success stories

36. Niche Brand Positioning Activities • Incorporate your SBS story into your firm’s: • Newsletters and Web site • Brochures and advertisements • Proposals • PPT templates • Client and prospect letters and other templates • Employee handbooks • In addition, use certifications or logos in the above and your letterhead and business cards • Then you can generate marketing campaigns and activities targeted to your ideal client using the best medium to attract them

37. Advertising Public relations – press, community outreach, sponsorships Article writing Public speaking Networking and alliance development Referral sources Trade conferences Surveys Direct mail Teleprospecting Seminars Lunch and learns Internal networking with partners Other client cross selling activities Other Poll #3 Which marketing activities do you find most successful in marketing your niche? (check all that apply)

38. Create a Marketing Calendar • Track your activities in a firm-wide marketing calendar that includes the: • Activity • Objective of the activity • Target market (clients and prospects) • Date of the activity • Owner of the activity • Status or comments • Cost • Leads and engagements sold

39. Educate Your Team • Be sure to teach your team the positioning and who the ideal target client is for your firm and each service line or initiative • Consider developing a simple script with the questions they can ask clients and prospects • Provide your team with the person they should refer new opportunities to or go to with questions

40. Next Steps • Develop your firm’s positioning for your small business services • Define your product service mix, pricing and ideal target clients for your small business services niche • Choose which brand positioning and marketing activities you’ll undertake • Determine the audience that each marketing activity will address, the objective, timing, owner, cost, and other elements in your marketing calendar • Communicate your plans and outcomes internally

41. Thank You! • Contact us at any time! Tamera Loerzel 952.226.1780 tamera@convergencecoaching.com http://www.linkedin.com/in/tameraloerzel Michelle Baca 505.217.2094 michelle@convergencecoaching.com http://www.linkedin.com/in/michellebacaprofile

42. Marketing Resources and Tools

43. Resources • Association for Accounting Marketing • http://www.accountingmarketing.org/required_readingCat.asp?readCat=Niche%20Marketing%20zxc%20Target%20Marketing • CPA2Biz Trusted Business Advisor Solutions – Transforming Your Client Accounting Services White Paper • http://clientsolutions.cpa2biz.com/index.html • Contemporary Marketingby Louis Boone and David Kurtz • Management by Bartol & Martin • Marketing Management by Peter Dickson

44. ConvergenceCoaching Resources ConvergenceCoaching’s web site includes articles and tools on these topics www.convergencecoaching.com Visit our blog for posts on leadership, business development and HR topics: http://blog.convergencecoaching.com Visit our Learning Center for self-study online courses and Marketing and Business Development Toolsets www.convergencelearning.com