The Secret to Scaling: How to Build & Implement a Fixed Fee Pricing...

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The Secret to Scaling:
How to Build & Implement a
Fixed Fee Pricing Plan

Your Hosts
Tom Maxwell
Head of Customer Success
Practice Ignition
Yoseph West
Head of Marketing
Hubdoc

Poll: How many monthly
bookkeeping clients do you
have?

Today’s Agenda
● Introducing the cloud accounting / bookkeeping business model
● How to bundle recurring and nonrecurring ...

The Inspiration Behind this Webinar
Background:
● Self funded + bootstrapped by Guy Pearson (now non-exec chairman plus
fo...

What is the Cloud
Accounting / Bookkeeping
Business Model?

Key Components of a Cloud Business Model
Value Costs Invoicing / Payments
Ex. delivering outsourced
accounting
Ex. staff w...

The Traditional Model: Compliance Services
Example

The Traditional Model: Bookkeeping
Services Example

Why Hourly & Cloud Software Don’t Work

The Cloud Model = Monthly Value

Moving Away from Hourly Billing is
Better for You and Your Clients
Fixed fee billing provides:
For Your Clients
● Better s...

The Cloud Business Model with Fixed Fees
Value
Deliver value to your clients
on a monthly basis.
Costs
Try to align all yo...

Poll: How would you
describe your current
pricing model?

How to Bundle Monthly
Service Packages

What is a cohort analysis?
Cohort = A group whose members share one or
more similar characteristics

Cohort Analysis: The Easiest Place to Start
● Who are my monthly clients?
● Who are my quarterly clients ?
● Who are my an...

Cohort Analysis
Break down the commonalities
What do you do for 90% of each cohort?
● The basics: financial statements, ta...

Monthly Clients Quarterly Clients Annual Clients
Core Services ● Bookkeeping
● Training and support
● Update and deliver
t...

How Do You Align All Cohorts to a Monthly
Package?
● What additional services can be delivered to quarterly/annual clients...

Use the Cohort
to Calculate a
Baseline Price

Time (hrs) Rate (p/h) Role type
Admin 0.1 80 Admin
ASIC/SEC/Companies 0.1 80 Admin
Preparation of Financials 4 200 Senior
...

Don’t Sweat the Small Stuff
Don’t worry about overages and underages on each and every client

The Law of Averages
Counter the over/unders by:
● Regularly reviewing your service bundles
● Develop a standard tech stack...

Time
(hrs)
Rate
(p/h)
Cost p.a. Monthly $ Time/Monthly Role type
Admin 0.1 80 8 Time 0.67 0.008333333333 Admin
ASIC/SEC/Co...

Considerations for Variables in Recurring Services
Bookkeeping and payroll are examples of services where variables dictat...

Considerations for Variables in Recurring Services
● Consider a tiered approach to packaging your services
○ Payroll: mont...

Seachange Accountants and Advisors:

Cost + Margin to
Scale Service Bundles

Review Cost and Margin as You Grow
July August September October November
Product Cost $79.17 $79.17 $79.17 $79.17 $79.17
...

Review Cost and Margin as You Grow
● Make sure you’re focusing on efficiency here:
○ As you add more clients your costs de...

The Role of Value
Pricing

The “Hug” Rule
Have you ever been hugged by a client for
completing compliance work? Chances are slim.
● Clients (typicall...

The “Hug” Rule
● Value pricing is ideal for project work that arises from the amazing work
you do when delivering your fix...

How to Have the
Value Conversation

Communicating Before the Change
Announce in advance
Send a client email 90 days in advance explaining
why you are changing...

Keep Communicating While You’re
Determining Prices
Share your plans and work together with your client
to figure out which...

Communication After the Transition
● Get your fees approved in writing with an engagement letter
● Set regular reviews wit...

Scaling Up + Becoming
More Profitable

The key metric is MRR (Monthly Recurring Revenue).

Traditional Growth Model
● No incentive to grow (as your costs grow with you)
● No incentive to become more efficient
● Pr...

Traditional Growth Model
Existing
client’s new
business
Lost client
Referral
Tax season

MRR Growth Model
● Incentive to grow (as your costs will eventually plateau)
● Huge incentive to become more efficient
● P...

MRR Growth Model
Projects should
fund your
growth activities
Profit (40%
can be
achieved)

MRR Growth
As you streamline, you focus on efficiency and driving
cost of doing the every day down, constantly boosting
pr...

Poll: What accounting
software do you support?

Your Three Takeaways
1. Align the three components of the cloud business model
(Value/Costs/Invoicing & Payments) by focus...

VIP Account for You
One free Hubdoc account for
Accountants & Bookkeepers
Simply sign up at
HTTPS://APP.HUBDOC.COM/SIGNUP
...

Getting Started on PI
Two offers:
1. Sign up for an annual plan and your first $30k in
processed payments is on us*
2. 50%...

Thank You + Q&A

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