I have been working for a client for a little over a year, on a 1 day per week basis, with a not too bad a return (it could have been better but I pitched a tad to low - chalked up to experience)
They are in the middle of relocating, and approached me last week to continue with them (the new location is a outside my normal territory by 20 mile each way), and to add additional services, which will amount to 2 days per week, one of which will be home based.
This time I revised my charges (based on suggestions on pricing by Bob, and a book he suggested). They didn't even quibble. Well they said "is that your best price?", I said "yes", they said "OK" (did I still go in too low?)
That's the first bit. The second thing was that also last week, I was approached by a local business to sort out a Sage mess, and to get a backlog up to date (it will take several week's at two or three days a week) , with a view to also continue on a 2 day a week basis, and again one of them home based. Again I revised how I normally price my work, increased it from the above job, and again they accepted without a quibble.
Now my first delemma is that will leave me short on time to provide my other clients, most of which are done on a monthly basis from home. It can be done but it will be hard, and probably mean, working most weekends too (I do now but its through choice). They are also long standing clients, with, to be honest a small return (Start up nievity - based on an hourly rate that wasn't realistic). I am considering reviewing their rates, and giving them the option to pay more and risk losing them.
My other dilemma, is that with these two clients, there is not much room left to expand, and if I commit and they decide at a later date to dispense with my services, it will mean starting over in terms of acquiring new clients to fill the void.
I am also, used to rearranging my week to suit me. Where by now I can not work during the week if I dont want to, from now on I will have less flexibilty.
can't tell you what to do... That would be like telling my granny to suck eggs!
The scenario as I read it is that the two clients will take up 80% of your standard time.
So 20% remains for the clients that have stuck with you for a long time.
At the moment clients have been trying to force down rates. In my case unsucessfully (so far) but in the case of an accountant freind of mine that I work with she took a serious hit on a client (nearly 30%!) in order to keep a client that her practice had grown quite dependant upon as a large chunk of bread and butter income. (Thats constant rather than one off's and short term gigs for anyone else reading this). (#1)
I fully agree that you should raise your rates in this scenario but such is in reality in the hope that some of them opt to leave for cheaper options.
What do you do if non of them leave? You say that you could manage the workload but what happens when one gets an investigation and needs emergency hand holding?
Do you think that now might be a good time to think about either taking someone on or subcontracting part of your stable to another local bookkeeper that you trust and who would accept appearing to the clients as though they worked for you in a similar manner to how some accountants work with contract staff.
For any work that you do away from the client sites you could use your 20% of remaining time to visit and collect but get the subcontractor to do the real work in the background.
Then again, if you are anything like me you would spend as long ensuring that the subcontractor had done everything correctly as you would doing the work yourself!
The above are just suggestions from someone whose adverse to losing good clients espechially when it opens you up to a risk of indue dependancy on the remaining ones.
The above said, congratulations on the excellent and well deserved news matey (and commiserations that some of it it Sage work, lol).
all the best,
Shaun.
p.s. for my practice I follow the ACCA guidelines even though I'm not ACCA (yet, might still happen) which dictate that in order to avoid dependancy and reduce practice risk one should not have any one client that after the first two years of your business provides more than 15% of practice income on a regular basis (thats actually the maximum with 10% given as the real benchmark figure).
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
................... Then again, if you are anything like me you would spend as long ensuring that the subcontractor had done everything correctly as you would doing the work yourself!
...................... Shaun.
p.s. for my practice I follow the ACCA guidelines even though I'm not ACCA (yet, might still happen) which dictate that in order to avoid dependancy and reduce practice risk one should not have any one client that after the first two years of your business provides more than 15% of practice income on a regular basis (thats actually the maximum with 10% given as the real benchmark figure).
Hi Shaun
Thanks for your view.
I had thought about employing someone when the time was right but like you, I would be always concerned that it wasn't done how I want it done, and would end up micro managing everything. Something to ponder on in the future.
Interesting ACCA guideline. I have thought about my situation a bit more, and thinking about it I could not turn them down, the income is just too good. The worst case scenario is that if I lost any one of them, I would still be financially better off than i am now.
I had always invisaged that I would have a lot of small business clients, on monthly/ quarterly cycles. Didn't consider the possibilty of two major clients on 5 day cycles!. One downer is that it almost feels like employment, except working for two, and I am having to be a bit careful that i don't fall in to the definition of an employee, for either client.
Any way off to renew my PII and complete my ICB MLR compliance records now. This year has flown by
Congratulations on getting the additional client, especially as it is on Sage :) , and for the extra work the other one is providing you. It is great to hear of some success especially down here in the SW.
For your clients that you do on a monthly basis from home, is there room or will there be room after the review in your price for the work to be outsourced to another local(ish) bookkeeper, so you still keep control of the work as it would all go through you. I know how hard this would be because of the fear that they would make a mess of it and create you even more work to put it right.
At the end of the day we can only work so many hours and you need to decide what is going to give you the maximum return for the least risk.
For some that would be taking on more smaller clients at a lower return with the trade off being if one leaves will have little effect on your income.
For others it will be taking on the two large clients with the greater return with the risk that if one leaves it will have a serious effect on your income.
Neither option is right or wrong. Will come down to personal viewpoint on return v risk.
For the record my personal choice would be to go with the 2 large clients giving maximum return and then increase the fees for the other clients to give an even greater return. It may be that you lose some of the smaller clients but if you lose say 50% of them then hopefully the increase in return on the ones you retain will offset the loss giving a greater return overall.
It all comes back to the fact that we can only work so many hours per week and have to maximum our return for that work while at the same time minimising the risk.
If you could work say 70 hours per week at £15 per hour you would earn £1050 per week. If you worked say 40 hours per week at £20 per hour you would earn £800. Less overall but frees up 30 hours of your week for yourself. Will depend how much you value these 30 hours as to what you will do. If you value them at more than £250 or £8.33 per hour you will choose to work the shorter week for less money.
Quote me "and commiserations that some of it it Sage work".
Quote Mark "Congratulations on getting the additional client, especially as it is on Sage".
And balance is returned to the force. lol... Now just to work out which of us is the Empire and which is the Rebellion.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Good luck Bill, take them and see what happens, even if you loose one of them in say a years time, think of the experience you would have gained and the money. You never know in a few years time you could still be working for both.
Maybe its time to get rid of some of the dead wood, maybe you may have an older client that you want to get rid off?
it's their licencing rather than their software that agrieves me.
If I buy software I expect to be able to use that software whether that is for one client or one thousand. I don't expect Sage to tax me for the privelage of increased income.
Worth noting that I also fundamentally disagree with a progressive tax system as well... And tax by NI... And stealth tax by Council tax... And public companies supporting charity... And sole traders not being able to claim mileage if over VAT registration threshold (after change of car)... Boy am I turning into a grumpy old man or what. bah humbug.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
As has been mentioned other options available to you include subcontracting it out; however, why not take the next step and take someone on. You could then have someone, perhaps a trainee. Whilst this would potentially take up some more time eventually you have cover for your other two clients and could even look to take on even more.
I was worried at first but now I have two great members of staff that save me time to concentrate on the business.
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