Business Predictions for 2021
Feb 22, 20212020 was a unique year for everyone. So much has changed and will surely continue to change over the coming years. But here are my predictions for businesses in 2021…
What is the most important thing for your clients this year?
2020 was tough. A phrase I found myself using a lot was ‘we need to reinvent’…
We had to reinvent ourselves and adapt to a new lifestyle of working from home. We had to reinvent within our firm and learn how to communicate with our team and our clients.
Our clients have had to reinvent as well. Many of them will have gone through some very dramatic changes, potentially struggling to keep their businesses open or trying to adapt to new technology such as Zoom.
It’s been a year of confusion and challenges – however, I believe for your clients 2021 is only going to get harder. Businesses will be hit much harder in 2021.
In 2020, governments around the world have been doing various tax breaks, reliefs, loans and giving financial support to help businesses survive.
The problem is… the majority of that support is going to have to be paid back.
2020 will not have made much money for your clients, and - as it currently stands in 2021 - we are still in lockdown and therefore still not fully open for business.
Your clients are going to have to start repaying all that support off very little income.
The most important thing for your clients this year is going to be cash.
Cash flow has always been important, but so was growing the business and making profit – this year cash flow will have more prominence.
Your clients are going to be trying to balance reinventing their business structure and learning new technologies whilst searching for new sources of revenue to try and pay back the loans from 2020!
Because of this issue, accounting and bookkeeping firms are in danger of making this huge mistake…
The big mistake we must avoid
When times are tough and your clients are struggling, there is a tendency to think you need to keep all of your clients by keeping your prices low.
I saw so many people reducing their prices in order to help their current clients and attract new clients last year.
That is a huge mistake.
As a profession, we were already way too cheap. That’s why accountants and bookkeepers work crazy hard for not enough money.
The root problem here is: we don’t know how to price.
Most accounting professionals are using old fashioned redundant methods of pricing, like hourly billing. We need to change the way we price.
Because of this pandemic, many people think that they need to reduce their prices. You should actually do the opposite.
You should put your prices up!
Not every client will survive this crisis. Inevitably some businesses will fail as a result of 2020. Yet, there are some great businesses out there who are reinventing and adapting – those are the people you want as clients.
When times are tough, your clients need you more than ever before.
What is the opportunity?
This is a great time for our profession to rise up to the challenge and help change people’s lives.
You can deliver so much value in these times through things like helping with cash flow, helping the client to understand the various changing rules, furloughs, tax deferrals and such.
You have an opportunity to add more value and when you can add more value, help your clients not only survive but grow and thrive in these times, you can also charge higher prices when you are value pricing (not when you price by the hour).
You need to shift from doing purely compliance work to advisory.
You have the opportunity to add exceptional value by helping your clients understand cash better, doing forecasts, giving them advice and helping them to build a better business.
The shift this year needs to be to focus on advisory.
With advisory you can add huge amounts of value to your clients – you can save them from losing their business, keep their income and protect their families and livelihoods, and help ease their stress by giving them some peace of mind.
That’s life-changing stuff. You should charge a high price for it.
If you found this valuable and would like to learn more about value pricing, I run a free live online training session every month with a topic chosen by you. Attend live and you can ask me any questions you have. Click here to register and I will send you an invitation to the next session.
Wishing you every success on your pricing journey
Mark Wickersham
Chartered Accountant, Public Speaker and Author of Amazon No.1 Best Seller “Effective Pricing for Accountants”