The most common mistake I see in my practice when a client starts a new business or side hustle is that they try to be everything to everyone. This leads to overwhelm, burnout and alienates the ideal client. By identifying your ideal client you increase your chances you will have clients you love working with. And that takes the work out of work.
A prime example of this is when a client tells me they are starting a restaurant. Their logic is that everyone needs to eat, to which I reply, “Yes, but they don’t have to eat at your place.”
If a restaurant is the business you want to be in (in other words, you LOVE the idea of working with food, employees and customers at a hectic pace all day) then you better be focused. Will you serve ethnic food? Take out? Delivery? Hours?
Advertising you have good food will not cut it. People want to know what you serve. The best restaurants are always known for their specialty. In Menasha, where my office is located, Mihm’s Charcoal Grill is known for their butter burger. People joke it is a heart attack waiting to happen. Their burgers are so moist and delicious! They are tucked away on a side street and the place is small. But those butter burgers are to die for, literally. People wait in line for that stuff! Business is good at Mihm’s. If you are ever in the area give them a try. You’ll visit more often afterwards.
In Wisconsin we have a gas station called Kwik Trip. They have the best coffee and pretty darn good food, too.
You would think a gas station is impossible to differentiate from other gas stations. If you thought this you would be wrong. Kwik Trip has become a destination. People travel across the Wisconsin border just to visit a Kwik Trip. (Are your ideal clients this fanatic about what you do?) The stations are well-kept, clean, employees trained and properly paid. It shows.
Several years ago Kwik Trip showed how to find the ideal client and nobody noticed. Except me! I recommend a version of what they did to certain clients when the strategy is appropriate.
Here is what Kwik Trip did. They printed up a bunch of coupon sized glossy flyers one-third the size of a regular sheet of paper, printing on both sides. On the flyer was a $1 off coupon for any pizza. They also announced they delivered. Next to the coupon was a list of all the pizzas available and a notation that Kwik Trip made their pizzas fresh in-house. There was also information for ordering your pizza online and picking up later.
So far nothing special Anybody, or business, could do this and it would make no difference or would cost a fortune distributing the coupons.
Kwik Trip took one hour, just one hour max, to implement a stroke of marketing genius. Yes, they had the coupons available at their gas stations and yes, employees handed them out.
But they also had an employee deliver to each business near each gas station a wad of these coupon flyers.
Wow! People didn’t read they delivered, they saw it in action. And they focused on their ideal client: people at work looking for a delicious, low-cost lunch.
People have a hard time passing up a discount, especially when the price of the product is already reasonable. Dropping off a thick wad of coupons at each local business allowed people working near the gas station several opportunities for the discount. Kwik Trip sold a lot of pizzas. I mean a LOT of pizzas and still do to this day.
How is this the ideal client? First, Kwik Trip promised delivery and they focused on delivering pizzas to the closest customers. Second, by focusing on local small businesses many delivered orders contained several pizzas. (It is cheaper to deliver five pizzas to one location than five separate locations.) Many people also picked up their pizza, fresh and ready, when they arrived.
I suggest to my restaurant clients they modify this strategy for their personal situation. I have never seen this strategy fail! For a few hundred dollars and an hour or so of time you explode your restaurant business.
The Ideal Client for You
What about other side hustles and businesses? How do they find the ideal client? The ones they love working with? The clients/customers that turn a job into a vacation because you love doing it so much?
The strategies listed above were to get you in the right mindset. Your business is probably different from Kwik Trip or Mihm’s.
Before you can have ideal clients you need to identify what your ideal client looks like and where they live and work. This is important: You must be very specific and detailed! It’s not enough for a dog walking side hustle to list “all dogs”.
Below I am going to outline the ideal client for my tax and accounting practice because, as you might guess, I’m looking a few few excellent new clients. Maybe most people need their taxes filed, but I don’t want everyone as a tax prep client.
Specifically, I’m looking for a client that needs bookkeeping. That will include tax prep work, payroll and consulting, too.
Below, I will outline my specifics of my ideal client. This means that most people that walk in the door or email will not get an offer to be my client! Read the last sentence 30 or so times if you are a business owner. Don’t act desperate. Many potential clients are a poor fit.
Remember, most clients on the prowl for a new accountant left their previous accountant for a reason!
I expect a new client will be a long-term relationship. This is not a one-and-done. I am not interested in cleaning up years of bad books only to have the client go AWOL for five years, returning with same same exact mess, IRS notices and all. Note: I don’t mind fixing messes as long as the mess stays fixed.
Ideal Client Sample
First, we need to be honest with ourselves. Why did we lose clients in the first place? Are we starting out in business? Are there things we need to fix internally before bringing in new clients? Are employees properly trained?
For readers on the Facebook page of this blog, you will already know why I am in the market for two, maybe three, new clients. To bring the rest of you up to speed: My office has had a high fatality rate. Over the past year over 4% of my clients died; over 1 in 25!
These clients died because they got old. It wasn’t a disease issue. Most were clients since the 1990s. Those that didn’t die decided to retire. Who can blame them. And then there were a few business clients close enough to retirement that took the opportunity when the economy was shut down for a while. The timing was right for them.
I think the reason for client loss isn’t an issue I need to deal with internally. Now I can focus on what I want new clients to look like:
- Must be U.S based. Some international sales are okay, but too much international and I need to bring in outside help.
- They can be located anywhere in the U.S. If outside my local area, must be willing to use our secure portal for document transfer.
- Will need more than tax preparation. Must also desire bookkeeping and consulting, plus maybe some payroll.
- Landlords are a specialty of mine and would love a few new clients that are landlords with multiple properties.
- Landlord clients should also be interested in consulting over all the tax reduction strategies possible.
- New business clients must be in a growth phase or stability phase. I don’t mind helping a firm wind down, but prefer new clients as long-term relationships.
- Must consider my services a value. If taxes, bookkeeping and consulting are done begrudgingly, I’m not a good fit for you.
- Pay my fee in a timely manner.
- Find my fee a value.
- When reviewing a potential new client I need to see at least a 5x return for the client, preferably 10X (see next bullet point).
- An ideal client is one that probably has fees to my firm of $5,000 or more per year. $400 of bookkeeping a month get them there. Even a small amount of monthly bookkeeping coupled with tax preparation and consulting should be sufficient.
- The minimum return to the client can come from tax reduction or additional business profits annually. An increase in the value of the business is also considered. However, the new client should be able to clearly see at least a 5X return on any fees they pay me. That means they should see $25,000 minimum in increased profits and tax reductions annually.
- A new client should be eager to communicate with my firm regularly. Disclosure of all pertinent information is a must. They must consider us part of their team.
- Must provide data in a timely manner.
- Must file all tax returns by the due date, plus extensions.
- Must remain current on tax payments. No self-inflicted tax wounds that require unlimited time trying to contact the IRS.
- Must be pleasant to work with.
- If they are leaving an accounting firm it should have been an amicable separation (firm closing/owner died/firm can’t handle all its work). Not a deal breaker, but a warning sign if they had problems with their previous accountant.
- If they have employees they use a proper payroll service so payroll taxes are paid and federal, state and local regulations followed.
- No paying employees or contractors under the table!
- Reports all income and expenses. No tax cheats!
I know the list is long, but it isn’t that hard for a new client to make the cut. They need to follow the rules, work with their friendly new accounting team and pay their bill.
Yes, I do make exceptions.
Yes, I say “no” to a lot of potential clients. I would rather take an afternoon nap than deal with the angst of having bad clients on my books. You, as the client, want the same thing. These rules also apply to me!
Feel free to use my list and modify to your needs. I know I will so don’t be surprised if I come back over the next weeks and months and clarify the list more.
Finally, if you are in need of an accountant that cares enough to be this specific, contact me. I really am in the market for two or three new clients of the right type. If it isn’t a good fit, I sometimes give referrals if I know a professional that might be a good fit. Sometimes it isn’t you; it is me.
And this is how you love your work, have less stress, start the day excited and make the world a better place.
It is also profitable for all parties involved, as it should be.
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