THE RADICAL CPA

The Radical Pricing Model: Start with $25K

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Deliver more value to clients while freeing your team from timesheets.

By Jody Padar
The Radical CPA

Consider the $25K Rule.

Because this method requires heavy lifting on the front end, a good rule of thumb is to only value-price engagements of $25,000 or more. If the client falls below $25,000, they are eligible for a fixed price or fixed price plus a value add. This rule is important because if your client is a small business, it doesn’t matter how much value they perceive in your services; they will not be able to afford value pricing above a certain level.

MORE: Three Critical Factors Drive the Value Pricing Trend | Accounting Disruptors Are Heading Your Way … with Deep Pockets | The Convergence of Trends Makes Pricing Changes Imperative | Stop Looking for Talent that Does Not Exist | Advisory Work Must Be Priced by Value, Not Hours
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Most services are fixed-priced, but based on conversations with the client, those prices may drop or be raised accordingly. Some of the data points used to set pricing are the PITA factor (pain in the a#%) and the client’s gross revenue.
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Three Critical Factors Drive the Value Pricing Trend

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Embrace the value pricing perfect storm.

By Jody Padar
The Radical CPA

Ron Baker is known as the value pricing guru in the accounting space. He was way before his time in separating the price of labor from the value of a product. Labor-based pricing is based on the difficulty of doing a task. Value pricing looks at everything from the client’s viewpoint. His argument is as follows: the value you provide your customer, regardless of the deliverable, is worth way more than the hour.

MORE: Accounting Disruptors Are Heading Your Way … with Deep Pockets | The Convergence of Trends Makes Pricing Changes Imperative | Stop Looking for Talent that Does Not Exist | Advisory Work Must Be Priced by Value, Not Hours
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While value pricing isn’t new, automation has driven it to the forefront. Automation gives CPAs up to 90 percent more time to provide valuable services based on their expertise, knowledge base and experience.

Although it was clear the cloud was going to have a disruptive impact on our business model, Ron Baker would always explain: it’s not the technology that’s going to make value pricing the way to go, the value’s always been there.

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The Convergence of Trends Makes Pricing Changes Imperative

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Kill the billable hour to earn what you deserve.

By Jody Padar
The Radical CPA

The speed of change is faster than ever. How are you going to react to it? That’s what I’m really preparing you for – redesigning your entire business model to become a more client-centric advisor. Value-based pricing models are the key component but not the whole story.

MORE: Stop Looking for Talent that Does Not Exist | Advisory Work Must Be Priced by Value, Not Hours
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Today’s automation, new competitors, staffing challenges and new technologies are conspiring to bring clients more value than they could have enjoyed before. All of it is shifting the way you need to think about your services, what clients value and how you get paid fairly for the expertise you bring to the table.
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Technology Helps in More Ways Than You Think

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Retention? New clients? Check, check.

By Jody Padar
The Radical CPA

The owners of “very prepared” firms say “technology is having a very significant impact on my firm,” vs. the less prepared who view technology as a utility, a mechanism for greater day-to-day efficiency. “Very prepared” firm owners report seeing and using the technology as an enabler of better business results.

MORE: How to Be a Small Business Advisor | Center Your Firm Around Your Client | Commit to Change | Your Client Base Is Global | Ready for Change, So Now What?
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This is exactly what the radicals believe and implement. Technology has already disrupted our core and we are proactively adapting to the changes it has created.

bar chart
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Center Your Firm Around Your Client

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Two businesswomen shaking handsThere are three ways to change the product-market fit. Only one works.

By Jody Padar
The Radical CPA

It’s hard to look at your firm from a customer’s perspective. That’s why we gravitate to a firmcentric point of view. This point of view asks questions like: What do we sell customers? How can we reach customers? What do we need to establish with our customers? And how can we make money from our customers?

MORE: Commit to Change | Your Client Base Is Global | Ready for Change, So Now What?
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We’re thinking about ourselves internally. Nobody wants to hang out with someone who only thinks of themselves, yet that is the way we run our firms.

Instead, I’m going to ask you to look at your business from your customer’s point of view. Design thinking asks the following:

  • What jobs do our customers need to get done and how can we help?
  • What are our customers’ dreams and aspirations?

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Commit to Change

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Post with two signs, "same" and "change"Be sure to document every stage.

By Jody Padar
The Radical CPA

Before you consider adopting the cloud or any of the “New Firm” mindset, you have to ask yourself if you are willing to be the change.

Once you decide, first thing, first. Own it! You have to commit. If you teeter it will be harder. Jump in feet first and feel the shock of the cold water.

MORE: Your Client Base Is Global | Ready for Change, So Now What?
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I’m not saying it won’t work if you wade in, I’m just saying it’ll be more of a challenge. When you change all your processes, it’s a lot of hard work but part of what will get you there is commitment. If you are seriously considering uprooting your firm’s foundation, you need to ask the following questions:
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Ready for Change, So Now What?

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How to implement design thinking.

By Jody Padar

Say it with me now: “I am a change agent.”

Before you consider adopting the cloud or any of the “New Firm” mindset, you have to ask yourself if you are willing to be the change.

MORE: Your Client Base Is Global
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

Once you decide, first thing, first. Own it! You have to commit. If you teeter, it will be harder. Jump in feet first and feel the shock of the cold water. I’m not saying it won’t work if you wade in, I’m just saying it’ll be more of a challenge. When you change all your processes, it’s a lot of hard work, but part of what will get you there is commitment. If you are seriously considering uprooting your firm’s foundation, you need to ask the following questions:

  • Are you a change agent?
  • Are you willing to be that change agent, because it’s going take a lot of strength, determination and perseverance?
  • How much time will this actually take, and what is your level of commitment? Maybe you’re the change agent but you are going to most likely need to have a team member help you commit.

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