Competing via price kind of makes sense, right? If you cost less than the firm down the street for the same quality of work then the clients will come to you. The big problem though is that you now have to do a lot more work to make the same level of money you were bringing in before. But if you outsource bookkeeping you might find a better way to take on your competition.
Offer More Services
Instead of lowering your prices you should consider expanding your firm’s menu of services beyond the basics of payroll, taxes, and so on into the realm of advisory services.
By becoming more than purely an accounting firm you become a financial advisor, which pays off for both you and the client in that more services are offered under one roof, which saves time and money, and you also become more involved in the day-by-day operations of a client’s business, making it easier for you to offer timely financial advice.
How does your firm keep up with this new menu of services? You outsource bookkeeping services to your overseas team.
Offering an expanded menu of services obviously means more work for you from existing clients, and work from new clients rolling in who weren’t served by your previous menu of offerings but are attracted by what they can get from you since your expansion.
As clients get used to the idea of having you on as an advisor they’re going to get used to it, and then think of you as an essential part of their business. They’ll want more of your time for consultations.
So how do you handle all of these extra demands on your time? One route of course is to hire in-house staff. But this can cost your firm a staggering amount of money when you factor in sick leave, physical costs (furniture, a computer, etc.) benefits, and so on… up to 1.4 times the base salary range.
If those new hires turn out to excel at their job then those benefits and salaries are going to have to be fairly juicy in order to stave off the bigger firms that are always looking to poach talented workers. But if you outsource bookkeeping you will have a team of experienced accountants doing all of the basic compliance work for you, and they’re un-poachable.
Plus since you don’t have any of the costs associated with a hiring process, you’re setting yourself up to be a full-service firm with a relatively small bump to your overhead costs.
Also, since you won’t be handling the basic time-consuming number-crunching in-house you’ll be able to spend more time with your clients, which is something that they’re going to love.
Compete with the Monster Compliance Firms
There’s one last point that should be addressed when dealing with competing by price – you can’t win.
Not if you’re a smaller firm anyway. There are immense compliance-only companies like H & R Block that are always going to be able to afford to go lower in price than you because of the volume of work they can do.
However, since they are focused on a very basic set of services your expanded menu of financial management, forecasting, succession planning services, and so on are going to make you much more attractive to clients who want to keep all of their accounting needs contained under one roof of a firm that they trust.