A Mistake from which I have learned

When starting up a business on your own, no matter how much advice you take and no matter how much care you take, mistakes are inevitable.

When starting up a business on your own, no matter how much advice you take and no matter how much care you take, mistakes are inevitable. 

However, as painful as these are, they are instrumental to our learning and ultimately necessary for our growth. Success tests us. The more success we desire, the greater and more inevitable the tests. These 'experiences' offer the potential to learn through practice and can be beneficial, if viewed in the right way, by employers and employees alike in order to improve performance. Mistakes should not, therefore, be criticised and looked upon with regret but viewed as opportunities to reflect, to ask why, to improve and to learn productively.

Brian Wright, director of FBD Consultancy, explained that one mistake that he has learned from is the clarity of specification of pricing to new and potential clients.

Brian explained:

“In the past, we would suggest a price range to the client for the services that we offered. For example, we would say to the client 'we anticipate this will cost between £200 and £300 plus VAT'. After suggesting this pricing, the accountant would be thinking 'Right, I have up to £300 + VAT to play with in order to complete this task', whilst the client would be left thinking 'Great, that will cost me £200'.

“This typically leads to a lot of tension between the client and the accountant. The client typically doesn't want to pay any more than the price that s/he had initially anticipated, whilst the accountant, feeling that the range specified was fair and left room for additional complexity or time, now feels undervalued if the client argues about or refuses to pay a higher than lowest amount quoted. So, who's right? No one! Who's wrong? No one!

“In my experience, we haven't kept clients very long after pricing disagreements as it usually does cause lingering resentment. Sometimes we have had to 'encourage' clients to move on if they are unwilling to pay the price we ask for our service; we are obviously not the right accountants for them”.

The lesson learned here is that it is not a good idea to quote a price range for a service because it can lead to tension, arguments, and clients generally end up unhappy. Another option would be to agree to charge a percentage of the value that you help the client to save. For example, 25% of the £1,000 that you helped the client to save in tax. That way there will not be resentment towards either the client or the accountant as, again, the value was agreed prior to starting the work. If prices are agreed from the beginning, it mitigates confusion and eliminates disagreement down the line.

Brian commented that the biggest lesson he learned was, “Not to quote price ranges. Give a fixed price for services where possible in an open and honest manner and be willing to explain why the prices are what they are. Our part of the deal is to simply inform the client what your fees are, educate them as to professional fees, and allow them to make their own decision. If you have to convince people to join you then they are likely not the right clients for you and, likewise, you aren't the right accountant for them”.

His advice is, “Don't sell to people. People don't like to be sold to. Let clients buy from you, based on their perception of the value of your services.”

“Today, we attract people who want to come with us on our journey together and we have far fewer disagreements. Exact prices are outlined and explained from the very beginning of the process, along with the values we believe they represent”.

“Then, it's over to the potential client.”

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© 2022 FBD Consultancy, Accounts & Tax Ltd. All rights reserved.

Directors: Brian K. Wright C.A., A.C.M.A., C.G.M.A. Anne N. Wright C.P.F.A. Co. Registration No: SC309527.
Registered Office: Sgarbach House, Binniehill Road, Balloch, Cumbernauld, G68 9AJ. VAT Registration No. 836 5445 10.

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