Episode 146 | Maximizing Firm Capacity: Strategies For Optimal Client Management With Ron Baker

Michelle Weinstein is joined by Ron Baker to discuss the concept of firm capacity and how it can transform your business. They dive into how adjusting your firm’s capacity can lead to better client experiences, increased revenue, and more freedom. If you’ve ever felt overwhelmed by client demands, this episode offers practical strategies to optimize your client roster and boost your firm’s performance. Tune in to learn how to manage capacity effectively and create lasting success for your accounting firm.

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Listen to the podcast here

Maximizing Firm Capacity: Strategies For Optimal Client Management With Ron Baker

Introduction To The Abundant Accountant Podcast

We have a very special guest. Our special guest started his CPA career back in 1984, and he said he is the recovered CPA. He’s the Founder of VeraSage Institute, which is the leading think tank dedicated to educating professionals internationally. He also has a radio talk show and is the host of VoiceAmerica.com. He’s also authored seven bestselling books, with so many to name, but you can make sure to go on Amazon and get all the books that you would like.

Before we welcome our special guest to the show, know that sometimes you look at your work piling up in front of you from low-value clients and wish you could just probably make it all disappear or maybe you dread the busy season because it means you’ll barely see your family for months. You worry about your health, constantly feeling exhausted, and know that the stress from work is really having a serious impact on you. You have no idea how to reduce your hours without losing any revenue or profit.

If any of this sounds like you, then actually, I have some really good news because none of those things are actually the real problem. The real problem is that you just don’t have a system for only working with ideal clients, maximizing your revenue, and really gaining back your freedom. Here at The Abundant Accountant, our system will allow you to gain back your freedom, grow your firm, and finally enjoy your work and your family without working long hours, without stressful tax seasons, and without having to hound clients for paperwork, even if you feel like everything depends on you and falls on your shoulders.

This is the same system that I’ve shown hundreds of firm owners, just like you, to create the firms they’ve always wanted to have. If you want me to show you exactly how to do this, go to TheAbundantCall.com and book your complimentary, no-obligation strategy call with me and my team.

On this call, we’re going to look at what you’re currently doing in your practice, also look at the revenue blockers, and help you lay out an exact roadmap so that you can, as much as, double your revenue in your firm without having to chase down new clients. If you love what we come up with and want to talk about working together, we can continue our conversation and explore what that would look like.

If you want to do it on your own, that’s okay too. We can part as friends, and you can send a couple of referrals our way. Everyone wins. The only way you lose is by not taking action and trying something different. Go to TheAbundantCall.com and find a spot that works for you to lock in your no-obligation strategy call with me and my team before spots run out. Let’s welcome our special guest, Ron Baker, to the show.

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Welcome, Ron, to the show.

Thanks for having me back, Michelle. You’re going to get sick of me at some point.

No, I’m not going to get sick of you. I don’t foresee that happening. Our conversations are so good. I think they’re very valuable. I get great feedback, and I think you always have a lot to say, and you can articulate it really well. That means that you’ll be back.

I look forward to it.

Ron, maybe someone doesn’t know who you are. Why don’t you share what it is that you do in, like, a minute or less, so the people that don’t know who Ron Baker is, can get to know you a little bit?

I’ve changed my status from recovering CPA to recovered CPA. I think I’ve been out of it long enough where I can say that. I started my life in a Big Eight accounting firm. Actually, I started my life in my own accounting firm in high school because I knew I wanted to be a CPA, and then went into the Big Eight and started my own firm after I left and realized the billable hour was a lousy customer experience.

We wanted to up the customer experience. We started offering fixed prices, and then that morphed into value pricing as I learned more about it and got more confident and better at doing it. I started teaching that concept, and then I wrote a book about it. The book took off around the world, then I got out of my practice, sold it to my partner, and I’ve been consulting, writing, and speaking ever since.

I’m glad that you’re doing that and that you are a recovered CPA because I know you have been saying recovering, but that was a long time ago. I’m excited to talk because I think, as it relates to someone’s sales experience and what we provide to our clients, be it access to us or, I think, well, here, let me just start with this, Ron. One of the biggest complaints, I think, from firm owners is that clients are calling all the time. They’re emailing you. You are answering texts, emails, and phone calls all day long, and you’re not getting paid.

I think most firm owners are sick and tired of being underpaid, undervalued, and underappreciated. I think what we’re going to talk about, which maybe Ron can actually define these two words because one word’s adaptive, and the second word is capacity, is how you can generate revenue from that by obviously pricing your services differently than you’re doing. You don’t feel taken advantage of, so you don’t feel like your clients are basically visiting the ER room at your local hospital all day long, and you’re like the ER surgeon, and you’re not getting paid a dime for it.

It all comes down to our client experience and how we mandate what we’re going to charge for, what we’re not going to charge for, and what we’re going to say and allow, and what we’re not going to allow. Adaptive capacity is what we’re talking about. Before we start, Ron, can you define both of those words for people who might not know what you’re talking about?

Understanding Firm Capacity Through Airline Seating

This idea struck me because I fly too much. You sit in airplanes and you think about, well, this is interesting. There’s a fixed amount of seats in an airplane. It’s interesting how the airlines divide up those seats. They segment even within the airplane. They have first-class passengers. They have business-class passengers. Of course, everybody’s got a premium seat where you get six inches more or something. You’ve got the back of the plane.

In some of the older planes, you even had a second story, the 747, and they put the business seats up there. I think that’s interesting because they can adapt their seating to their capacity requirements. They can move the bulkheads around. They get to configure their cabins and figure out how much are first-class, business-class. Why can’t CPA firms do the same thing? Our capacity can be adaptive, and we can do that on the fly or at least set parameters around how many first-class customers we should have, how many business-class, how many premium, and how many back of the airplane, the PriceLine.com shoppers and the bereavement fares and the people that are only buying based on price. It’s not that you can’t serve those people.

It’s just that you should allocate so much capacity. Once that capacity is filled up, that’s it. There are no more seats. You don’t take on more people. This idea really intrigued me. We got a schematic of a Boeing 777 and laid it out for people and said, look, 5% to 8% of your customers maybe, and, of course, these numbers are just suggestive, they can vary by firm, but 5% to 10% or so can be first-class.

Maybe 15% to 25% can be your business class. The rest can be, or the middle, the premium, can be 30% or so. The back of the plane, whatever those capacity numbers are, stick to them. You can adjust them. That’s where the adaptive comes in. What we’re trying to prevent, Michelle, is we’re trying to prevent them from adding capacity for, basically, C and D customers. No airline would do that. No airline would put a bigger plane on a route to accommodate more PriceLine.com shoppers.

They wouldn’t do that for the back of the plane. If they had the top 5% to 8% of their clients flying first class, they might upgrade the plane if that demand is there because they’ll generate a premium, which will be a very profitable flight.

In fact, we used to joke that if CPAs ran airlines, they’d put the second story in the back of the plane to add more capacity for the D and F customers. The other thing that this teaches is that we should always have spare capacity for our best customers. This is also from flying too much, but once you get up to top status, as I’m 1K on United, in fact, I’m way above that because I have a million-plus-mile flyer.

You mean, like, one million, not one K?

Yeah, one is, in fact, I think I’m at one-six or something. That gives you lifetime status. The point is, as a 1K’er, United guarantees me a seat anywhere in the world at the last minute. Believe it or not, I’ve had to pull that trigger a few times. I’ll be at an event and then I’ll get a call and say, “We have this conference going on in London and one of the speakers got sick. Can you substitute?” Literally, I ran to the airport either that night or the next day and said, “United, can you get me to London?” They always have a seat, and if they don’t, they’ll bribe somebody off of it and put me on it.

In other words, they’ll bribe the customer who values their seat the least to give it to their customer who values it the most. That’s where we got the airplane auction. Some economist figured that out, by the way, way back in the ’70s, and the airlines didn’t think it would work. Of course, it’s common practice. That taught me a lesson about why it is that when CPAs are really busy, and this happened in my firm all the time during tax season, a client needs something really bad, like maybe a special report or some type of project, and you always try and put it off until after April 15th. That’s like being sold out on your plane, and then your best customer shows up at the last minute.

We should always have spare capacity, and it gets even simpler than that. Think about going to a dentist. You call your dentist, you have a bad toothache, and he says, “We can fit you in in two weeks.” No, unacceptable. I expect my dentist, my doctor, to have the capacity for emergencies, and they plan for that, and they should plan for that, and so should we. When you think about capacity, there are two types. There’s the maximum capacity that your firm has. Let’s just deal with a solo because that makes it really easy.

If you can give a real-life example of a firm you have in mind, and we can make up the name if you don’t want to use an actual name, I think that’d be really cool to correlate that to the airplane and having this visual effect with the maximum capacity and then going through this example.

Great. I’ll give you an example of a sole proprietor. One person, not even a personal assistant. Just a solo, solo.

What’s their name? Make it up.

How To Determine Maximum And Optimal Capacity

I’ll call her Jenna, and Jenna has, when I asked her, “What is your maximum capacity?” I’m not talking about hours. I’m talking about the number of customers you feel you can handle at an extremely high customer experience level. She thought that number was around 40, and I said, “Okay, that’s fine. Now, what is your optimal capacity?” In other words, what is the capacity that would allow you to still work on your business, still have time to recharge and deal with your emotional capacity, still have time to invest in your CPE and all the other things that you have to do as a business owner? Obviously, that optimal capacity is going to be less than the maximum capacity.

When you think about it that way, it’s usually around 60% to 70% of your maximum capacity. When we really dove down into this, and I made her think about all these other things that she’s going to have to do as a solo, we figured out that her capacity is about 25 customers. Well, then you’ve got to adjust your pricing, and of course, there are multiple ways to do that. We can, and I know we’ve talked about pricing on other shows where we’ve talked about offering through options and value.

Value pricing or subscription model, we’ve done.

Exactly. The point is that you always want to have capacity for those emergencies or when the customer is in an ER situation. I’m not saying we should always be running around with our hair on fire, but this is one of the things I love about the DPC doctors, the direct primary care physicians. While the average physician has 2,400 patients, these doctors run at 600 patients, meaning when you call them, FaceTime them, or text them, they usually respond within 10 or 15 minutes, or somebody from their office gets back to you. If that text comes in at 2:00 in the morning and you’re asking your doctor, “Should I go to the ER, or should I sleep on this and not worry about it?” they give you a response, maybe after asking you some questions.

What’s that worth? It’s incredibly valuable to have that level of access. When you do see them, you get to spend an hour with them, not five minutes. The only reason they’re able to do that is because they have capacity. Their optimal capacity is much lower than their maximum capacity.

I personally actually experienced this with Mila, my dog. She had this eye surgery a year ago, or maybe not even a year ago, six months, it feels like it was a year ago. It was probably a couple of months ago. Just randomly, I was like, “Why did she wake up and her eye is shut? One of them.” I’m like, “No, I can’t go through this again.” I sent the specialist, she was an eye vet, ophthalmologist, a message. I said, “I know Mila just got cleared with you a couple of weeks ago, but for some reason, her eye is shut.”

That means if their eye is shut, they’re in pain. I could have gone to the ER room, that was one option, but there was no guarantee she might have been there, etc. I sent a text and an email. She actually sent a message back probably within 15 or 20 minutes, or someone on the team did, and said, “We’ll squeeze you in at this time. Can you get here?” I’m like, “Yeah, let me drop everything and rearrange my schedule.” I guess that’s because I’m at optimal capacity, right, Ron? I can recharge, do my CPE, and take care of self-care.

I guess this is just things that happen in our lives. I was able to rearrange my schedule, take her in to see the ophthalmologist. I’m glad I did. She had this weird piece of hair growing on the inner part of her eyelid that she just literally plucked out. She was fine. The dog was fine. It was nothing you could see with the human eye. She had a 10x magnifier and she did a full eye exam, though. She didn’t even shortcut anything. I was just like, “This is why you pay a premium to go to a specialist,” or in the world of your firm, this is why clients will pay you a premium because they want to have that option. If it does become an emergency, you have room for your VIP clients.

Maybe it’s not even VIP clients, but high-end clients expect a certain level of service. At times, those people, I don’t think, use and abuse it like the C and D clients you were talking about earlier, but when they do need it, we need to be ready to move, just like you with your, I don’t know, 1K or I think it’s 1 million-miler club, isn’t it Ron? Not 1K.

No, 1K. 1K is 100,000 miles a year, so you have to earn that on an annual basis.

Anyway, they guarantee you a seat anywhere, and then, like you said, they’re bribing their lower-tier client to move to a different flight with like a $500 voucher. It doesn’t matter because the worth and the value you bring to the airline is so much greater than the $500 voucher that they’re going to give away to someone else who’s willing to switch flights.

You’ve got a marketing mind, Michelle. I’ll tell you this, too. United, because of my search habits and the cookies they have in my system, I believe I pay a premium for every seat. I bet if I went and looked at a flight, and you went and looked at a flight, we’d probably get different quotes.

I wouldn’t be surprised. I do no know if that’s the truth, but that would be a fun experiment. We should do that.

I think we tried it with Ed on American because he’s top tier with American, and we ended up getting different prices, but I can’t remember the difference. It wasn’t much.

I have no status because I am not flying a lot anymore. I just fly for free on all my points, so I don’t even pay for a seat. I think I would be a great person to do a comparison. We should buy. Will you go to United and log into your account? I’ll log into mine, and we’ll book the exact same flight. Let’s see what our prices come up at.

We’ll do that. Maybe we’ll do that after the show and report back. The point is, I’m more than happy to pay a little bit of a premium on every ticket I buy just for the insurance of being able to pull that trigger because look, I make my money flying and speaking, and when I have an opportunity, I’ve got to be there. I don’t care about the timeline, and United has always come through. They’ve always got me there, and I’m more than happy to pay. We are more than happy to pay for access.

I think I told this story one of the other times we discussed this, I have an eye doctor, and I had glasses that needed to be replaced because there was a scratch on my lens, and I couldn’t get in to see my eye doctor. I called in October, and they gave me a January date. I screamed and yelled. They moved me up to December, like after Christmas.

When I finally saw the doc, I said, “Doc, I had to go to another doctor to get an eye exam.” He said, “This is unacceptable. Why don’t I have a subscription that I can pay you monthly so I have a special lane and can get right in front of the line when I need you?” Of course, he apologized profusely and said, “Do you mean like concierge medicine?” I said, “Yes, because I’m willing to pay for that. You’re talking to a first-class customer who values his time tremendously. I’m willing to pay, and you don’t have an offering for that.” Maybe he doesn’t want that type of practice, and that’s fine.

That means you need to find another doctor then.

Exactly.

Just like we would have had to find another, I already moved eye doctors once for my dog because the other one felt like you were just another deli ticket. You know, the delis at the grocery store, and you grab your number? That’s literally what this ophthalmologist’s office felt like. I was like, something’s wrong. This does not feel right. I had this other experience, but the same problem. When I first called, when I knew Mila was having some issues, she got sick, and then her immune system attacked her tear glands. They got me in right away.

They were just an office, excuse my language. The other doctor had a two-month waiting list. However, what I should have done, and here’s the lesson learned, if you have an animal, go to the best doctor, and you can go there via the ER. I should have just paid the premium and gone to see her via the emergency room, which was an option they did tell me, but I just didn’t do it. I was like, “This other one squeezed me in.” Even though they had the capacity to squeeze me in, they weren’t the best, unfortunately.

In the world of our animals and pets, that is an option where you can go through the ER. I think as we correlate that to everyone here and your firm, it’s like, what is the price and what are the amounts that you need to charge? You are the ER for your clients when they need it. It’s actually a viable option. You don’t end up like you with a scratch on your glasses, having to go to a different doctor.

Exactly. The other thing that is really neat about having spare capacity is that it allows you to serve your best customers when they really need you in those emergency situations and gives you the capacity to get better customers. I want to throw this idea at you because this occurred to me. My colleague Dan Morris, who’s a CPA, and I were driving around Lake Tahoe. You’ve probably been up there. It’s stunning, is stunningly beautiful. I think we were driving around the lake, and at the time, and this would have been like the early 2000s, they were doing a lot of renovation on the California side of the line.

Maximizing Firm Capacity: A great advantage of having spare capacity is that it allows you to support your best customers during emergencies and gives you the capacity to attract even better customers.

They were bulldozing all these t-shirt shops and tchotchke souvenir places. They were putting in more high-end condos and hotels. I think they were building a convention center. Dan came up with this brilliant idea. He says, as they knock out these older, crummier places and put in newer ones, yes, those newer ones are only going to be able to serve fewer people, but they’re going to be of higher value. He says, “Why can’t we do that in a CPA firm?”

Forced Churn: Upgrading Clients Like Airlines

In other words, for every new, first-class, business-class customer we bring on, why can’t we get rid of 1 or 2, maybe 3, or even 4, depending on how many customers you have from the back of the plane? We called this idea the forced churn. In other words, we’re forcing out customers but not doing it all at once. We’re not freaking people out. We’re just saying, “If you bring on a brand new, first-class customer, why don’t you get rid of somebody in the back of the plane? Maybe even two people.” Set a pace that’s comfortable for you. Over time, that’s how you upgrade the cabin.

I love that. I’m going to play the firm owner, Ron. I am your new Jenna. I think that’s what we called her.

My all-time favorite names.

Great. I am going to Ron Baker’s consulting to figure out how I can optimize, never turn away people, and always have a better capacity at optimal capacity. How would you walk through a firm owner who says, okay, this all sounds good? This might get rid of my problem of clients making demands for things that are driving me crazy and having all the issues that the firm owners have. What are the first few things that they need to write down? Think about change and implement in order to start making sure that they have optimal capacity. Jenna’s example, we went from 40 people being at max capacity. You ask the question, “What’s your max capacity?”

Maybe we need to come up with a more specific question for a firm owner. Like you said, they’re going to think about time. How do we reframe that question? It’s like, well, what’s your max capacity if you were only working the amount of hours you wanted to in a week? Maybe it’s just 30 or 40 tops, twelve months out of the year. It doesn’t matter what time of year, we’re not only offering the best and highest customer experience, but what else would they need to do?

What steps should we say to do these then? If a firm owner’s listening, saying, “I want to implement this. I’m sick and tired of the way it’s going. I got to do this every year. I tell myself I’m going to make a change. I never make a change. I’m sick of feeling exhausted and stressed from work.” It’s having a serious impact on many firm owners.

I think you’ve seen it firsthand, and they don’t have an idea of how to reduce the working hours without losing revenue and profits. I think this is a good shift in setting some boundaries for yourself, but also to actually implement because we can talk about increasing revenue, increasing profitability, changing your sales process, and changing your client experience. You actually have to put this into action. What’s the action plan, Ron?

Strategies To Improve Firm Capacity

We all know the low-hanging fruit is to adjust your pricing. That can easily be done. You can do it one client at a time, and you can start offering them three packages, and most of them are going to pick the center, the middle package. Some of them are going to want that white-glove experience. Some of them are going to be like you and me when it comes to your eye doctor for your dog or for you. You’re going to be willing to pay more, and you’ll never sell a high-dollar package if you don’t offer one, which is the beauty of offering three options. You could easily do that. Also, I would want people to think about, okay, tell me the configuration of your plane. Let’s put these clients in their various seats.

We actually like to draw out a plane. I’m sure there’s an AI robot that can draw.

We actually did it on a spreadsheet once where people could fill out on the spreadsheet with a schematic of an airplane, but you could do a cruise ship, too. It’d probably be more fun because there’s more cabin configurations and things like that. The point is that you’d start to make a plan about how many back-of-the-plane customers will you let go as you add front-of-the-plane customers? You’d figure out that forced churn ratio. I’d try and at least double or triple their price, assuming that their customer experience was up to snuff and their offering was premium enough to justify that. I’d probably start with the pricing first.

However, Michelle, we both know the strategy and positioning, I would say even purpose, come long before the pricing. I want to know why you became a CPA. I want to know why you started your firm, what really excites you. You probably did it to help people. I want you to live that purpose. I want you to do the type of work and have the type of clients that you want. I’d want you to be niched.

I’d want to work on that, but that’s probably more long-term type of work. For immediate results, let’s get your pricing up just like we did with Jenna. We took her from 40 to 25 customers. We did that over a period of a year or so, as she added new customers, she let go of two old ones, and that got her down to her optimal capacity. It gave her more time. She’s working less. She’s got fewer clients, and she’s making more money.

I think I love the third thing you said to do, draw out your plane, write in all your clients’ names, and put them in whatever seats you think they should go. The people in first class, it’s time to have what I call a re-enrollment conversation to increase their fees to where they should be. Especially if some people I’ve heard increase 5% to 10%, I’m talking like 200%, 300%, 400% increase and make the drastic necessary changes in order to have a different firm and have a different life. If you just keep going the way you’ve been going, isn’t that the definition of insanity? You’re just going to keep getting the same result. I get a lot of firm owners wrong.

They think they have a challenge in getting leads. They have a challenge getting new clients when the challenge is converting your current clients into high-paying premium clients and getting more people into your first-class seats and business class, and maybe some in premium and not focusing a whole ton on your back-of-the-plane people.

One of the things that I really learned from studying, like Disney quality service and just excellent customer service organizations like Neiman Marcus or Nordstrom or all those types of companies, is their philosophy, our customers aren’t going to get better until we do. We can sit around and bemoan the F customer, who’s very demanding, maybe doesn’t pay so well or on time or whatever, always complains. The fact of the matter is, they’re not going to get better until we do.

I love that.

I think if we up our offering, then all of a sudden, an F or a D customer could become a B or an A customer. We have to get better first. Some people you’re just not going to be able to please, and those, I think you should kick off the plane, preferably without a parachute. We should be able to get better. I think one of the complaints you hear when people think about this in terms of the airplane analogy, what you’ll hear is, I have a lot of people that pay me coach fare but get first-class service. That’s unsustainable.

If you’re getting first-class service, if you’re in that front of the plane, you’re getting your champagne when you board, and you’re not getting a bag of peanuts. You’re getting cutlery and a nice meal and wine and booze. You got to pay for that pampering. You’re going to have to have a price discussion one way or the other. Sometimes you can’t, you can’t get those people up. You’re going to have to exit them off the plane.

You’ll need to replace them with your VIP first-class client, just like you, and give vouchers to some of your other people that you need to get off. Even if it is a little bit of a cost to you to get rid of them, it’s always going to pay off in the long run. That’s beautiful. Ron, thank you so much.

Exactly. I don’t think of it as a cost. I think of it as an investment.

It is an investment, but it’s an outlay of cash. The investment is the opportunity to work with the new client or the upgraded one, like you, that’s the investment department. Even if there’s, like, I would call it still a cost, wouldn’t you? It would cost you maybe, let’s say, $500 to $1,000 in a voucher, which is just going to go against the higher investment that you’re going to get from your first-class client like you. It’s still profit, but that person is still a cost. We need to get rid of them.

Exactly. I view it as freeing up capacity for better, for better passengers. I’ll tell you something else that I think is really good can make this transition easier. This is more of a medium-run strategy. I think this, nothing jacks up confidence better than if firms, especially solo firms or small firms, if they have waitlists. If you have a waitlist, you’re going to just make better decisions all the way around, short-term, medium, long-term, because you always know that if you have to let somebody go, there’s a group of people eager to get in. This is what I see with DPC docs. Almost every one of these independent DPC docs is at maximum capacity because the demand is so great for their type of experience and offering, and they all have waitlists.

My dad was on a waitlist for about four months, and somebody had to die before he got in. I’ll tell you, that gives you a lot of confidence. That’s like having a lot of money in your savings account, and you don’t have to worry as much. Try and build a waitlist. Of course, that requires you to say no. I find a lot of CPAs have trouble saying no. Any customer that they’re looking at is a good customer.

Say No To Low-Value Clients

I don’t think that’s true. I think you have to pay more attention to your emotional capacity as well and make sure you’re only dealing with the number of customers that you can do and still remain sane and still fulfill your purpose of having an impact on their lives. Saying no, I think, is really important. Of course, my favorite way to say no is just to say something like, “Well, I’d love to, but I don’t want to.”

I think also saying no, as you were sharing earlier, just removes the stress and anxiety that I think so many firm owners feel, not only right now but just like, it just compounds, and it gets worse and worse and worse and worse. In order to remove that, the more you can say no and start playing a game, I think it will organically create a waitlist for yourself, especially.

I think it goes back to number one, you have to build out your configuration of your firm via a plane. How many seats do you have in first class? How many in business? How many in premium? How many in the back of the plane in coach? Once you figure that out, then you can have the ability to say no, but I don’t think anyone reading has ever thought about, “Let me make my plane, and let me see how many seats I have. What is my optimal capacity?” Until you know that, we can’t do anything else.

That’s why I love the metaphor.

I do. I love it. I think that’s why I was so excited. I love flying too, but like I said, I only fly twice a year internationally. Free business class lay down bed, otherwise, I’m not going to go. I think that’s a great action plan. Ron, is there anything else that you would want to add that maybe we didn’t talk about yet or that popped up in your head to really solidify the importance of having adaptive capacity in any firm size, especially if you’re just starting out or have had a firm for a while, or you have a job, but you really want to have your firm actually succeed? This is a crucial element to making sure you have the best firm possible and having the room for your VIP clients or the people that have a real emergency. You have the capacity in the space and the mental space to help them.

I’ll give you two more things that I thought of as we were discussing this, and I’m sure you have protocols for this, but some of this obviously is going to require you at some point to offboard customers, firing. I hate the term firing customers because they’re not employees, but you know what I mean? You’re going to have to offload a customer. How do you do that? I really think it needs to be a conversation. Don’t do it by email. That’s as bad as breaking up with somebody over a text. It’s no class, but it’s unprofessional.

Maximizing Firm Capacity: Letting a customer go should be a conversation. Don’t do it by email—that’s as bad as breaking up with someone over a text. It’s not only tacky but also unprofessional.

We should sit down with them. We should also give them a nice long runway where they can maybe even suggest other firms that we know and trust to make the transition as smooth as possible. You’re going to be there for them in that transition. If their new CPA has questions, anything like that, you can do this very professionally and keep your reputation intact. It’s like somebody analogized this.

I think this is brilliant, too. Firing customers requires, like breaking up with a boyfriend, it’s not you, honey, it’s me. I’ve changed. You got to make it like that. You give them a soft landing and you keep their dignity and respect and all of that. Firing customers, I think you need to be competent in doing that.

The second thing I would say is that I see this mistake all the time, largely in a little bit bigger firms than, say, a solo, but I’ve even seen solos do this. They’ll have this idea that, well, in the slow months, like the summer or something, when we’re not chasing a deadline, you know, we’re not as busy, we’ll lower our prices. Please, please, please don’t do that. That just degrades your pricing integrity. It sends confusing messages into the marketplace.

You never see Apple run a sale. You never see Apple discount. The only way Apple’s prices become lower is when new technology comes out. They might lower the price of the older technology or keep it the same, but they never run discounts or sales or anything like that. Please don’t cut your prices around capacity.

That’s so true. I never realized that that’s when the old iPhones come down, the new ones come up.

That’s why their innovation curve is so rapid because they want 50% of their revenue from products that didn’t exist three years ago. That’s a tough, that’s a tough KPI. You really have to stay on top of things.

It is to be like 3 to 5 years in advance of everything in order to keep up with that. Ron, thank you so much. This was a great conversation, and lots of implementation is there for all of you reading. I want to say thanks again, Ron. It’s always an honor to have you here. I think you have such great metaphors and analogies and all of that. It’s an honor to have you here and grace us with your time and your presence. I know you could be on a business class flight on the way to London, and we’ll go do our comparison, and we’ll be back with you with our results in a future episode.

Awesome. Thank you, Michelle. It’s always great to talk with you.

Thank you all so much for joining Ron and me here on another amazing episode. I love how he said our customers won’t get better until we do. If you are ready to get better and make a change in your firm and have all the ideal clients who value your expertise in the right seats on your plane as early as this month, without having to hound clients for paperwork or spend every night and weekend working just to keep up, I can help you.

Not only that, but I’m also going to show you how to do all this in a way that feels simple, effortless, and automatic. You barely even have to think about it. This is the same system I’ve shown hundreds of tax, accounting, and bookkeeping firm owners just like you who have used it to create the firm they’ve always dreamt of.

If you want me to show you exactly how to do this, go to TheAbundantCall.com and book your complimentary, no-obligation strategy call with me and my team. On the call, we’re going to look at exactly what you’re currently doing in your practice and what the revenue blockers are that you are having that don’t align with where you want to go, so you can have an exact roadmap to double your firm revenue without losing clients and without ever having to chase down new clients.

Remember, everyone’s going to win. The only way you lose is by not taking action and trying something different. Go to TheAbundantCall.com and find the spot that works best for you to lock in your no-obligation strategy call with me and my team before spots run out. Thanks so much for being here, and we’ll see you in the next episode.

Important Links

• VeraSage Institute
• Ron Baker
• VoiceAmerica.com
• PriceLine.com
• TheAbundantCall.com

About Ron Baker

Ronald J. Baker started his CPA career in 1984 with KPMG’s Private Business Advisory Services in San Francisco. Today, he is the founder of VeraSage Institute—the leading think tank dedicated to educating professionals internationally—a radio talk-show host on the www.VoiceAmerica.com
show: The Soul of Enterprise: Business in the Knowledge Economy.

Ron has authored seven best-selling books, including: The Firm of the Future; Pricing on Purpose; Measure What Matters to Customers; and Implementing Value Pricing. His latest book, co-authored with Paul Dunn, Time’s Up!: The Subscription Business Model for Professional Firms, was published in November 2022.

Ron has toured the world, spreading his value-pricing message to over 275,000 professionals. He has been named on Accounting Today’s 2001-2007, and 2011-2022 Top 100 and Top 10 Most Influential People in the profession; and inducted into the CPA Practice Advisor Hall of Fame in 2018. He is a faculty member of the Professional Pricing Society. He presently resides in Petaluma, California.