Why This Accounting Firm Can't Hire Its Way Out — Transcript

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1. 0:00[laughter]
2. 0:01>> It's going pretty well. Uh
3. 0:03so
4. 0:03>> a bad day with a name like that.
5. 0:06>> All right.
6. 0:07>> [laughter]
7. 0:07>> Go for it, Ben. Talk to me.
8. 0:09>> All right.
9. 0:10All right. Thanks, Alex. Okay. So, uh I
10. 0:13just have a two-part question here for
11. 0:15you.
12. 0:15Uh
13. 0:16first uh first and kind of foremost
14. 0:18here,
15. 0:19uh how do you kind of
16. 0:21acquire uh
17. 0:24semi-senior, but not senior, kind of
18. 0:25mid-level staff, right? And then second
19. 0:29off
20. 0:29>> How do I get that mid-level staff?
21. 0:30That's the question.
22. 0:31>> do you
23. 0:33Yeah. Yeah, that's that's predominantly
24. 0:35my question, right?
25. 0:36>> level or manager?
26. 0:39>> Manager level, right? Because I have I
27. 0:41have an easy time finding
28. 0:44Yeah, that's true.
29. 0:46Um
30. 0:47But the kind of issue that I was having
31. 0:49was, you know, finding these mid-level
32. 0:50staff that are qualified enough to do
33. 0:52the position in the first place. I'm
34. 0:54having a really hard time with it,
35. 0:56right? You know.
36. 0:57>> What kind of business is it?
37. 0:57>> it's uh it's an accounting business.
38. 0:59>> Okay, got it. Do you need an accountant
39. 1:00who's mid-level, like an accounting
40. 1:01manager?
41. 1:03>> Well, kind of. It's you know, I'm
42. 1:06looking for somebody that has a CPA
43. 1:07license or EA license. Ultimately, I'm
44. 1:10just trying to or or is kind of on that
45. 1:12path, right?
46. 1:13>> Yeah.
47. 1:15Well, option one is go to the schools
48. 1:17where they're on that path and see if
49. 1:18you can create an affiliate not
50. 1:19affiliate, but like a referral program
51. 1:21for them. Plenty of those people want to
52. 1:22have uh career opportunities for people
53. 1:24who are in there and that can create the
54. 1:25farm system. That's thing one. Thing two
55. 1:26is that you can also just do direct
56. 1:28outreach to
57. 1:29other accountants. Um what is your gross
58. 1:32profit per accountant per year right
59. 1:33now?
60. 1:35>> Uh gross profit right now, it's probably
61. 1:39I'd say about 120,000.
62. 1:41>> Per accountant, right?
63. 1:43>> Yeah.
64. 1:44>> Okay, got it. Um and what and what's
65. 1:47gross revenue for an accountant?
66. 1:50>> Uh gross revenue is about, you know,
67. 1:52200,000-ish,
68. 1:54somewhere around there.
69. 1:55>> Got it. So, you pay them 80, you make um
70. 1:59you make 200?
71. 2:00>> 200.
72. 2:01>> Yeah, got it.
73. 2:02>> Yeah.
74. 2:02>> So, I'm I'm actually going to bet that
75. 2:04right now you have a two-pronged issue.
76. 2:07Which is thing one is you're probably
77. 2:08undercharging, and as a result of
78. 2:10undercharging, you're not able to pay
79. 2:13above market so that you can attract the
80. 2:15talent that you need.
81. 2:18>> Mhm. Okay, sure.
82. 2:20>> Yeah, I mean that's that's Right now
83. 2:22you're running on 60% gross margins. For
84. 2:24me, my rule of thumb with services is
85. 2:2680% or higher.
86. 2:29>> Yeah.
87. 2:30>> Right? So, if 80's the base, then we
88. 2:31need to make $400,000 a year
89. 2:33per accountant.
90. 2:35>> Yeah.
91. 2:36>> So, you probably What are your close
92. 2:37rates for customers right now?
93. 2:40>> Uh my close rates are around 80%.
94. 2:42>> Yeah, dude. 80% means you've got a
95. 2:44you've got a for sure double, maybe a
96. 2:46triple in pricing that's sitting right
97. 2:47there.
98. 2:50>> Okay.
99. 2:51>> So, you're supply constrained, and in a
100. 2:53supply constrained setup and with high
101. 2:55close rates, that's a a clear
102. 2:57prescriptive, no question in my sleep
103. 3:00double triple in price.
104. 3:02And then that unlocks an extra $200,000
105. 3:05a year, and all of a sudden you can go
106. 3:06to those accountants and offer them 150.
107. 3:09All right, and then you will get them.
108. 3:10>> Yeah.
109. 3:11>> And you're happy to do it because at
110. 3:13150, you're still making way more money
111. 3:15than you're making right now.
112. 3:17>> Yeah, that's true.
113. 3:19You know, I'd be less less busy, too.
114. 3:21>> [laughter]
115. 3:22>> Great.
116. 3:24>> Yeah.
117. 3:25>> Where do we want to go from here?
118. 3:27>> [laughter]
119. 3:30>> So, the the kind of Okay, so the other
120. 3:34kind of question that I had
121. 3:36uh
122. 3:36because my accounting business, you
123. 3:39know, it's a pretty traditional
124. 3:40accounting business, right? You know, uh
125. 3:42we we do the kind of standard suite of
126. 3:44accounting services, right?
127. 3:45>> Yeah.
128. 3:46>> Uh
129. 3:46but
130. 3:47yeah, but
131. 3:49kind of
132. 3:50yeah, I I was just kind of curious how
133. 3:53you would test you know, that pricing
134. 3:55model then at that point, right?
135. 3:57>> What do you mean?
136. 3:57>> You know, because
137. 3:58>> You mean test the price model that I
138. 3:59just said?
139. 4:01>> Yeah. Yeah.
140. 4:02>> You do you do the exact same thing
141. 4:03you're currently doing.
142. 4:04You do the exact same thing you're
143. 4:05currently doing. Same pitch. And then
144. 4:07right when you say the number, you just
145. 4:09double it.
146. 4:10>> Yeah.
147. 4:11>> That's how you do it.
148. 4:11>> Okay. Sure.
149. 4:13Yeah. I think
150. 4:14>> And if you don't close as many, guess
151. 4:15what? Doesn't matter. Your supply
152. 4:17constrained anyways.
153. 4:20>> Yeah. Yeah, true.
154. 4:21Okay.
155. 4:23Yeah, because again to double or triple
156. 4:25price, you know, I think I I think I
157. 4:27remember watching one of your YouTube
158. 4:29videos. You know, it to triple price,
159. 4:32you know, it's it's kind of a
160. 4:33mind-blower, right? For me. Right?
161. 4:35Because we do a monthly recurring model,
162. 4:37right?
163. 4:38Where you know, it's
164. 4:39>> Yep.
165. 4:40>> And and I I think that it's a crazy
166. 4:42value, right? You know, that we offer to
167. 4:44>> don't think it's that crazy cuz you're
168. 4:45not willing to charge more for it.
169. 4:48>> Yeah, true. I guess.
170. 4:50>> That's right. You're not [laughter]
171. 4:51You're not selling me very well right
172. 4:52now. I don't believe you.
173. 4:54>> Yeah.
174. 4:55>> If you thought it was that good, you
175. 4:56would you'd charge for it.
176. 4:59>> Yeah, that's true. But yeah, you know,
177. 5:01>> You got to put your money where your
178. 5:02mouth is. Right now, you're just a
179. 5:03talker.
180. 5:05>> Yeah. Yeah.
181. 5:07You know, that that's that is that is
182. 5:09the point, Alex, right? You know, but to
183. 5:11be quite fair, you know, you think about
184. 5:12it, these small to medium-sized
185. 5:14businesses is what I'm ultimately, you
186. 5:16know,
187. 5:17uh, kind of fixated at, you know,
188. 5:18500,000 to a million. And then,
189. 5:20you know, ultimately we just offer this
190. 5:22bundle package, right?
191. 5:24You know,
192. 5:25doing their taxes at the end of the
193. 5:26year, we do the bookkeeping, and then we
194. 5:28do their payroll on a monthly basis,
195. 5:29right?
196. 5:30So,
197. 5:31>> Are you going to try to sell me on the
198. 5:33way that you're
199. 5:34Let me Let me pause you for a second.
200. 5:36One of us is going to win this sale.
201. 5:38You or me.
202. 5:40>> [laughter]
203. 5:40>> Your current way of doing business is
204. 5:42why you called, which is that you can't
205. 5:45get talent, you can't scale because
206. 5:46you're supply constrained, you're
207. 5:48closing four out of five people that you
208. 5:49talk to.
209. 5:51>> Yeah.
210. 5:52>> Okay.
211. 5:53Do you want Do you want to keep having
212. 5:54that?
213. 6:00>> No. I I'd rather not be supply
214. 6:03constrained, right? You know, I'd I'd
215. 6:04rather be
216. 6:05>> me Then don't sell me
217. 6:07Then don't sell me and don't sell you on
218. 6:09your problem.
219. 6:11>> Yeah.
220. 6:12>> Right?
221. 6:13>> You got to change to change.
222. 6:14[clears throat]
223. 6:14>> Right?
224. 6:15You're intimidated by the fact that you
225. 6:17just have to say a different number at
226. 6:18the end of the phone call.
227. 6:19>> That's it. Literally, the worst case
228. 6:21scenario is person says no. It's not
229. 6:22like you can't change the price back.
230. 6:25>> Yeah. Yeah, that's true.
231. 6:28Okay.
232. 6:29Yeah. And that basically solves my
233. 6:30issue, Alex. Thank you.
234. 6:32>> Glad I could help.
235. 6:35>> All right. Go back.
236. 6:36>> Have a good one, bud. You were a sport.
237. 6:38I appreciate you.
238. 6:40All right, later, man.
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